Union Budget 2026: Everyone is eagerly waiting for the Union Budget 2026. The Union Budget 2026 is expected to be presented on 1st February 2026 by Nirmala Sitharaman, the Finance Minister of India in the Lok Sabha.
This presentation marks a significant moment in Indian political history, as the Minister delivers her ninth consecutive budget—the longest uninterrupted streak for any Finance Minister, surpassing the previous records of her predecessors. There is greater focus expected on sector-wise allocations, updates on income tax, and measures the Central Government may adopt to scale exports.
Union Budget 2026: Highlights of Economic Survey 2025-2026
However, ahead of Union Budget 2026, Finance Minister Nirmala Sitharaman has tabled the Annual Economic Survey 2025-2026 in the Parliament on Thursday. Let’s know the key points of the Economic Survey:
- Strong Growth: India’s economy is expected to grow at 7.4% in 2025–26, keeping it among the world’s fastest-growing major economies.
- Positive Outlook: Growth in 2026–27 is likely to stay strong at 6.8%–7.2%, despite global challenges.
- Low Inflation: Retail inflation stayed very low at around 1.7%, helped by stable food and fuel prices.
- Higher Spending: People spent more, with private consumption reaching its highest level in over 10 years, supported by better incomes and job stability.
- Strong Investment: Investment remained healthy at about 30% of GDP, driven by government spending and growing private investment.
- Better Fiscal Health: The fiscal deficit reduced and is moving towards safer levels, showing disciplined economic management.
- Healthy Banks: Banks became stronger, with bad loans at multi-year lows and faster credit growth.
- Export Strength: India’s exports hit record highs, especially in services, while foreign exchange reserves stayed strong.
- Sector Performance:
- Services led economic growth
- Manufacturing and infrastructure showed solid progress
- Agriculture recorded strong output, including record foodgrain production
- Future Focus: The Survey stressed building strategic resilience, making India an important part of global supply chains, and preparing for AI safety and regulation.
- Financial Inclusion: Access to credit improved for small and informal businesses through schemes like Jan Dhan, MUDRA, and credit guarantees.
Union Budget 2026: Expectations from Union Budget 2026
| Category | Budget 2025 (Last Year’s Reality) | Budget 2026 (This Year’s Expectations) |
| Personal Tax | Major Overhaul: Basic exemption raised to ₹4 lakh. Incomes up to ₹12 lakh (₹12.75 lakh for salaried) made tax-free via rebates. | Fine-tuning: Expectations for a Standard Deduction hike from ₹75k to ₹1 lakh and relief on health insurance premiums. |
| Slab Changes | Significant restructuring of New Tax Regime slabs to make it more attractive. | Slabs are expected to remain stable; focus may shift to rationalizing the 30% peak tax rate. |
| Fiscal Deficit | Achievement of 4.8% and target set for 4.4% for the following year. | Focus on maintaining the glide path toward 4% by FY27 despite global volatility. |
| Capital Gains | Rationalized holding periods and increased LTCG tax from 10% to 12.5%. | Demands to increase the tax-free LTCG limit from ₹1.25 lakh to ₹2 lakh. |
| Infrastructure | Huge push in Capex (approx. ₹11.11 lakh crore) focusing on railways and roads. | Expected 10–15% increase in Capex, focusing on Deep-tech, AI, and Green Hydrogen. |
| Rural/Agri | Focus on PM-Kisan and organic farming initiatives. | Focus on Climate-Resilient seeds and expanding post-harvest storage (PM Dhan-Dhaanya). |
Union Budget 2026: Focus on Infrastructure Sector
Infrastructure investment acts as the backbone of economic development — it improves mobility, supports industries, creates jobs, reduces logistics costs and strengthens connectivity between regions and markets. Budget 2026 is expected to reinforce this focus through planned spending, policy support, and reforms.
Roads and Railways Budget 2026 Expectations
The Union Budget 2026 is expected to continue a strong focus on infrastructure by increasing government spending to support economic growth and job creation. More funds are likely to be allocated for roads and highways, including expressways, national highways, bypasses, and logistics corridors, to improve travel and goods movement. The railway sector is also expected to receive steady support for modernisation, capacity expansion, safety improvements, and better connectivity across regions.
At the same time, the government may boost urban development through investments in smart cities, water supply, utility services, and modern transport hubs. To speed up project execution, greater emphasis is expected on public-private partnerships (PPP) and asset monetisation to attract private investment. Overall, the focus will be on strengthening logistics and connectivity by improving road-rail links, freight corridors, and port access, helping reduce transport costs and making Indian businesses more competitive.
Defence Budget 2026 Expectations
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Higher Spending: Defence allocation is expected to rise to strengthen security and military readiness.
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Capital Expenditure: More funds for new equipment, aircraft, ships, missiles, and modernisation.
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Self-Reliance: Focus on boosting domestic defence manufacturing and private sector participation.
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R&D & Technology: Increased funding for AI, drones, electronic warfare, and advanced weapons systems.
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Exports: Support for defence exports to global markets.
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Modernisation & Readiness: Continued upgrades in infrastructure, procurement, and operational readiness.
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