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The government’s emphasis on infrastructure-led growth and public investment as a crucial demand anchor for the economy is reaffirmed in the Union Budget 2026, which has set capital expenditure (capex) at ₹12.2 lakh crore, up from the revised projection of ₹10.9 lakh crore for FY 2025–26. The allotment is 9% more than the capital expenditure budgeted for the prior year.

As FM focused on healthcare and improvement in services, here is a look at India’s health budget.

Projected STT collection for FY 2025-26 was ₹78k crores. Collection so far (until Jan 11) is ~₹45k crores. Even if we estimate another ₹12k crores by March 31, that brings the total to ₹57k crores, almost 25% below the projection.

The Nifty index has bounced back from lows, recovering over 450 from lows.

For her budget statement this year, Finance Minister Nirmala Sitharaman wore a traditional Kanchivaram saree made of handwoven silk. The act has political overtones in addition to showcasing India’s rich textile legacy. The finance minister wore a West Bengali Laal Paad saree in 2021, the year Tamil Nadu, West Bengal, and other states held elections.

Suchitra K Ella, President Designate, CII, Co-Founder & MD, Bharat Biotech on Budget 2026 expectations

In percentage terms, the comparison of the capital expenditure (capex) between the Revised Estimates (RE) for FY 2025-26 and the Budget Estimates (BE) for FY 2026-27 is as follows:

Capital Expenditure Growth

Total Capital Expenditure: There is an estimated increase of 11.5% in the total capital expenditure for FY 2026-27 (₹12,21,821 crore) compared to the revised estimates for FY 2025-26 (₹10,95,755 crore).

Effective Capital Expenditure: This broader measure (which includes grants-in-aid for the creation of capital assets) is projected to grow by 22.1%, rising from ₹14,03,906 crore in FY 2025-26 (RE) to ₹17,14,523 crore in FY 2026-27 (BE).

Expenditure as a Percentage of GDP

Total Capital Expenditure: This remains steady at approximately 3.1% of the GDP for both FY 2025-26 (RE) and FY 2026-27 (BE).

Effective Capital Expenditure: This is expected to increase as a share of the economy, rising from 3.9% of GDP in FY 2025-26 (RE) to 4.4% of GDP in FY 2026-27 (BE).

Defence Allocation in the “Rupee Goes To” Pie

Current Allocation: For the FY 2026-27 Budget, Defence is allocated 11% (11 paise out of every rupee) of the total government expenditure.

Specific Capex Note: The document specifies that the “Central Sector Scheme” (allocated 17% or 17 paise) excludes capital outlay on defence.

Reduce BCD for components & parts used in manufacturing of civilian aircraft

Exempt basic customs duty on raw materials imported for MRO

Buyback proceeds are taxed like dividends in the shareholder’s hands. You pay tax as per your slab. Companies deduct 10% TDS before paying you.

FM announces tax holiday till 2047 to any foreign companies that provides cloud services to Indian customers through Indian reseller entity

Nifty below 24,800, down over 500 points

In a move away from an officer-driven approach in customs, seamless digital process for cargo clearance by govt agencies

The customs integrated system will be rolled out in 2 years

FM announces Safe Harbour Margin Of 15.5% Applicable All IT Services

The Nifty index has fallen over 1% from the highs.

STT on options increased to 0.05% vs 0.02% and increased on Futures 0.15% – 0.1.

Buyback proceeds are taxed like dividends in the shareholder’s hands. You pay tax as per your slab. Companies deduct 10% TDS before paying you.

Nifty Defence is 3% off its high, FM yet to announce defence measures in the budget.

The change in timeline for delayed return extended from 31st December to to 31st March with payment of a nominal fee

TCS on overseas travel cut from 5% & 10% to 2%

Non-debt receipts at ₹36.5 lakh

Net tax receipts ₹28.7 lakh cr

Net market borrow: ₹ 11.7 lakh cr

Gross market borrow: ₹17.2 lakh cr

FY27 Net market borrowing ₹11.7 lkh cr

FY27 Gross Borrowing : ₹17.2 lkh cr

Fiscal Deficit For FY26 – 4.4%

Fiscal Deficit For FY27 – 4.3%

The shares of Groww declined from highs.

Overall investment limit to PROIs (Person Resident Outside Indi) increased to 24% from current 10%

The Nifty PSU banking index is down over 2% as banking stocks remain under pressure.

Propose to set up a High Level Committee on Banking for Viksit Bharat to comprehensively review sector and align it with India;s next phase of growth

Vision for public NBFCs has been outlined with clear targets for credit disbursement and tech adoption

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