Union Budget 2026 EXCLUSIVE: As Finance Minister Nirmala Sitharaman is set to present the Union Budget 2026 on February 1, defence industry is expected
to get a major boost amid sustained emphasis on military upgradation. Sources told ET NOW that the government is seeking major expansion in the defence Budget.
Meanwhile, The Economic Survey 2025-26 is set to be tabled during the Budget Session of Parliament today, January 29. Sitharaman will table the Economic Survey in both Houses of Parliament during the Budget Session. The Budget session which started on January 28, 2026 will end on April 2, 2026.
The Economic Survey is an official report card on the government’s financial performance and the state of the economy during the year ending March 31.
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As India awaits patiently for the Budget 2026, let’s take a look at all the key points on what sources told ET NOW about the defence Budget:
– The government is likely to significantly increase the defence Budget for the financial year (FY27).
– Other than higher allocation, the existing rules and processes may be simplified to improve private participation in defence manufacturing.
– Existing rules for acquisition in the defence sector may be simplified to improve private participation.
– Defence Budget allocation may be increased by 20-25% for FY27.
– The defence ministry has also sought higher allocation for the defence research and development (R&D) projects.
– R&D spending likely to be increased to Rs 35,000-40,000 crore.
– The private sector may also receive financial aid from the government for defence R&D projects in line with the public sector companies.
– Measure to support the defence sector going forward and helping in creating a level playing field in the sector.
Meanwhile, Jyoti Gupta, Senior Research Analyst at Nirmal Bang Institutional Equities, explained how it could play out, covering potential benefits, the Operation Sindoor impact, stronger focus on research and development, and the expanding role of AI in defence.
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“The long term outlook definitely remains supportive but near term valuations are stressed and therefore selective profit booking or tactical entry on dips may be prudent,” Gupta said.
Union Budget 2026
February 1 will mark the second full annual budget of the Modi 3.0 government. For Sitharaman, it will be her ninth consecutive Budget, making her second only to former finance minister Morarji Desai who had also briefly served as prime minister.
A Union Budget is the financial statement of the government. It presents the proposed revenues and expenditures over the specific fiscal year.
In a circular issued on January 16, 2026, the NSE informed all trading members that live trading sessions will be conducted on Budget Day as per the regular market timings, despite it being a Sunday.
The government had earlier in a post on social media asked citizens to share their suggestions for the Budget process by participating under #MyGov initiative and share ideas, view points that reflect people’s aspirations and help in strengthening inclusive growth and national progress for a stronger India.
A Federation of Indian Chambers of Commerce and Industry’s (FICCI) pre-Budget survey reflected strong optimism among industries on growth prospects. PTI reported.
