
Union Budget FY26: Nirmala unzips the purse, showers the goodies
Virendra Pandit
New Delhi: First the good news for the salaried people: No income tax for those earning up to Rs. 12 lakh per annum.
Unlike the past Budgets that filled the Treasury, this one fills the people’s pockets, said Prime Minister Narendra Modi.
“With a special focus on the MSMEs, and Startups, we have opened many sectors for the youth, and common citizens will drive the Viksit Bharat mission. It is a force multiplier, will boost investment, consumption, and growth, and fulfills the dreams of every Indian, reflecting the aspirations of 140 crore Indians. It is a people’s Budget,” he said in his first reaction to the Budget.
In her record eighth Union Budget in a row, Finance Minister Nirmala Sitharaman, who tabled the document in the Lok Sabha on Saturday, the government has raised the income tax exemption limit to Rs. 12 lakh per annum under the New Tax Regime. This revised tax framework aims to lower the tax burden for many citizens, particularly those earning salaries.
She also announced to introduce the New Income Tax Bill along with multiple tax reforms aimed at maximizing returns for all taxpayers, and that the new Income Tax Bill will be unveiled next week.
Sitharaman announced a slew of schemes to propel economic growth, starting with the extension of the PM Dhan Dhanya Krishi Yojana to 100 districts, the setting up of a Makhana Board in Bihar, and a National Mission on high-yield seeds. A Mission for cotton productivity will also be set in motion, with a focus on seafood exports, projected to reach Rs 60,000 crore. The government also plans to set up a six-year pulses mission to achieve self-sufficiency, with a focus on climate-resilient seeds, improved productivity, and higher remunerative prices for farmers.
The Centre will roll out a scheme offering Rs 2 crore for first-time women entrepreneurs, Scheduled Castes, and Scheduled Tribes. For Bihar, the FM announced that the capacity of the Indian Institute of Technology (IIT), Patna, will be expanded as part of a broader initiative to enhance IITs.
The Centre is to launch a modified UDAN scheme to connect 120 new destinations, ferry four crore passengers, and boost regional air connectivity.
In the FY26 Budget, the government has revised its capital expenditure (capex) target for FY25 to Rs. 10.18 trillion, down from the previous Rs. 11.1 trillion, which may impact some infrastructure and development projects, although it said the key sectors will continue to receive support.
Recognizing the rising influence of the gig economy, Sitharaman announced a social security scheme for gig workers. The government will issue identity cards and maintain a national registry of one crore gig workers, ensuring their inclusion in welfare initiatives. The move is expected to benefit workers engaged in app-based platforms such as ride-hailing, food delivery, and e-commerce logistics.
To encourage domestic battery manufacturing, the government has announced zero Basic Customs Duty (BCD) on key capital goods required for electric vehicle (EV) battery production, and proposed exempting 35 additional capital goods for EV battery manufacturing and 28 for mobile phone battery production. This move is expected to lower the cost of setting up lithium-ion battery plants in India, boosting the nascent industry.
To strengthen exports, the government will set up an Export Promotion Mission, jointly led by the Union Ministries for Finance and Commerce. A new Bharat Trade Net (BTN) will serve as a unified platform for trade documentation and financing, aligning with the best global practices, to streamline export procedures and provide easier access to credit for businesses.
To boost the tourism sector, the government will introduce visa-fee waivers for select tourists and develop 50 top destinations in collaboration with state governments, to increase foreign tourist arrivals and enhance infrastructure at major attractions.
The new Budget also provides major relief to the healthcare sector, with 36 life-saving drugs added to the list of fully duty-free medicines to make essential medicines more affordable and accessible.