Finance Minister Nirmala Sitharaman is presenting Union Budget 2026 today, February 1, marking her ninth consecutive budget under Prime Minister Narendra Modi’s leadership. This historic occasion is only the second time in India’s fiscal history that a budget is being presented on a Sunday—the first was on February 28, 1999, by Yashwant Sinha during Atal Bihari Vajpayee’s NDA government.
Table of Contents
Union Budget 2026 Key Economic Projections & Expectations
| Aspect | Details |
|---|---|
| GDP Growth (FY26) | 7.4% |
| GDP Growth (FY27) | 6.8-7.2% |
| Previous Capex | ₹11.2 lakh crore |
| FPI Outflow (2025-26) | ₹23 billion |
| Fiscal Deficit Target | 4.4% |
What’s at Stake This Budget?
Tax Relief Hopes: Speculation is rife about extending Section 87A rebate to make income up to ₹15 lakh tax-free under the new regime. However, experts caution that last year’s reforms already cost nearly ₹1 lakh crore in revenue, limiting fiscal room for generous tax cuts.
Foreign Investment Crisis: With FPIs pulling out ₹19 billion in 2025 and ₹4 billion in January 2026, targeted tax relief for foreign portfolio investors could restore confidence. Bajaj Finserv’s CIO Nimesh Chandan calls this a “crucial juncture” for attracting durable FDI and FPI flows
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Railway Modernization: The Railway Budget focuses on safety upgrades including Kavach 4.0, Vande Bharat sleeper rollout, and senior citizen concessions following recent accidents. Explore more on India’s infrastructure development and railway modernization plans.
Employment vs AI: India’s employment paradox—excessive farm labor versus insufficient modern sector jobs—demands MSME credit easing, faster payments, and employment-linked incentives to combat wage stagnation and the looming AI job threat.
ITC Tobacco Tax Blow: ITC lost nearly ₹1 lakh crore in market value after December’s cigarette tax hike (₹2,050-₹8,500 per 1,000 sticks plus 40% GST). Investors desperately await clarity on tobacco taxation policy.
Fiscal Balancing Act
The government faces a critical choice: maintain aggressive ₹11.2 lakh crore capex to drive growth or prioritize fiscal consolidation at 4.4% deficit to reassure bond markets. This decision signals how India balances jobs, demand, and debt management.
FAQs
Q: Why is Union Budget 2026 being presented on Sunday?
A: This is only the second Sunday budget in Indian history, allowing uninterrupted parliamentary proceedings—the last occurred in February 1999 under Yashwant Sinha.
Q: What growth rate is projected for India’s economy?
A: The Economic Survey 2026 projects 7.4% GDP growth for FY26 and 6.8-7.2% for FY27, driven by regulatory reforms and private investment.
