Defense and Modernization
One of the standout features of the Union Budget 2026 was the significant increase in the defense budget. The total allocation reached Rs 7.85 lakh crore,
underscoring the government's commitment to national security. Within this, a substantial Rs 2.19 lakh crore was earmarked specifically for the modernization of defense capabilities. This substantial investment indicates a strategic focus on enhancing the country's military readiness, incorporating advanced technologies, and upgrading existing infrastructure. This boost is a clear indicator of the government's resolve to strengthen the defense sector.
IT Sector Developments
The Union Budget 2026 brought noteworthy changes for the IT sector, placing IT services under a single category. This initiative aims to streamline operations and provide clarity for IT companies operating in India. The budget also showcased a strategic approach to digital transformation and technological advancements, with significant allocations for the 'India Semiconductor Mission 2.0'. This mission is designed to boost the semiconductor and electronics components industry. This highlights the government's vision of fostering innovation and making India a global hub for technology and IT-related services. The focus on semiconductors, with an outlay of Rs 40,000 crore, signals the government’s commitment to self-reliance in this critical area.
Healthcare Sector Updates
In the health sector, the Union Budget 2026 took a significant step by waiving customs duty on drugs used to treat cancer and rare diseases. This decision is aimed at reducing the financial burden on patients, providing affordable access to essential medicines. This move will help reduce prices for life-saving medications. The government’s commitment to improving healthcare accessibility and affordability is evident through this policy, as it would likely increase the availability of critical treatments. These updates underline the budget’s aim to improve the health and well-being of the population.
NRIs and Investments
The Union Budget 2026 introduced measures to ease compliance for Non-Resident Indians (NRIs) concerning property and investments. These adjustments include streamlining regulations and simplifying the processes involved, making it easier for NRIs to invest and manage their assets within India. The government also dropped the requirement for a Tax Deduction and Collection Account Number (TAN) for NRI property transactions, further simplifying the process. These modifications are aimed at boosting investment inflows, improving the ease of doing business, and strengthening the bond between NRIs and India's economic growth.
Taxation and Rebates
The Union Budget 2026 addressed key aspects of taxation, including adjustments to income tax slabs and rates under both the new and old tax regimes for the financial year 2026-27. The Section 87A rebate limit was also announced. These changes impact taxpayers directly, offering potential benefits or adjustments to their tax liabilities. Additionally, there were announcements related to commodities, with a list of items that would become cheaper and costlier within the food and beverage industry. These decisions are critical as they directly influence the consumer market, and are designed to make certain goods more or less accessible.
Market Reactions & Analysis
The Union Budget 2026’s announcements triggered significant reactions in the stock market. On the day of the budget speech, the stock market experienced a considerable downturn, with the Nifty50 and BSE Sensex facing a substantial drop. This market response prompted analysis from financial experts to understand the reasons behind the volatility. The primary causes of this dramatic market crash were examined to assess the immediate and long-term consequences of the budget. Understanding these market dynamics provides a comprehensive view of the budget's broader impact on the economy.
