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Budget 2026: Finance Minister Nirmala Sitharaman announced a series of measures in her Budget speech aimed at accelerating and sustaining economic growth in line with the vision of the government ‘Sabka Sath Sabka Vikas’.

Emphasising the continued thrust on capital expenditure, she proposed increasing government capex to ₹12.2 lakh crore for FY27 from ₹11.2 lakh crore in FY26.

Alongside the capex push, the Budget carried significant stock market–relevant announcements spanning financial sector restructuring, foreign investment access, taxation changes, and bond market reforms. The announcements included plans to restructure public sector NBFCs such as Power Finance Corporation and Rural Electrification Corporation, allow individuals resident outside India to directly buy Indian equities with higher ownership limits, and raise the investment cap for Persons of Indian Origin to 24%.

On the taxation front, the Budget proposed measures such as buyback proceeds to be taxed as capital gains, higher STT on futures and options and extended timelines for revising income tax returns, while keeping LTCG and STCG unchanged. The Finance Minister also announced incentives for municipal bonds, introduction of total return swaps on corporate bonds, and a review of foreign exchange management non-debt instrument rules to deepen India’s bond and capital markets.

The Indian stock market witnessed a sudden, sharp fall in intraday trade on Sunday, February 1, after the Finance Minister (FM) presented her ninth consecutive budget, announcing measures to accelerate economic growth while maintaining fiscal prudence.

The Sensex crashed more than 2,300 points from the day's high, while the Nifty 50 dropped to 24,571.75 after the FM announced the STT hike. Sitharaman proposed to raise the STT by more than 50% on futures to 0.05% from 0.02% and to 0.15% from 0.01% earlier on options transactions.

The Finance Minister said, “I propose to introduce a market making framework with suitable access to funds and derivatives on corporate bond indices. I also propose to introduce total return swaps on corporate bonds. Municipal bonds to encourage the issuance of municipal bonds of higher value by larger cities. I propose an incentive of 100 crore rupees for a single bond issuance of more than 1,000 crore.”

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