Union Budget 2026 Highlights – Stock Market Impact, What Becomes Cheaper & Key Takeaways

February 1, 2026 Navya

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What is the Union Budget of 2026?

Union Budget 2026 Highlights – The Union Budget of 2026-27 is the Annual Financial Statement of the Government of India presented by Finance Minister Nirmala Sitharaman to Parliament on 1 February 2026. It outlines the government’s estimated revenues, planned expenses, tax policies, and economic priorities for FY 2026-27. The Budget plays a key role in deciding where money is spent (like infrastructure, health, defence) and what policies the government will follow to foster growth and stability.

The 2026 budget is Finance Minister Sitharaman’s ninth consecutive Union Budget and focuses on sustaining growth amid global volatility while building domestic capacity across sectors.

Union Budget 2026 Highlights

Here are the key Union Budget 2026 Highlights are:

Capex & Growth Priorities

Capital expenditure (Capex) set at a record ₹12.2 lakh crore, signalling infrastructure expansion across India (rail, transport, logistics, high-speed corridors, freight networks).
Focus on future-ready infrastructure, especially in Tier-2 & Tier-3 cities, and rare earth corridors in mineral-rich states.

Tax & Compliance Changes

No change in income tax slabs, meaning current tax rates continue for individuals.
Timeline for ITR filing extended till 31 July for eligible taxpayers.

Sector Support & Industry Focus

Launch of India Semiconductor Mission 2.0 with a boosted outlay of ₹40,000 crore to strengthen chip manufacturing.
Dedicated ₹10,000 crore SME Growth Fund to support micro, small and medium enterprises.
Strategic push for textiles, bio-pharma, and electronics ecosystems.

Financial Stability & Borrowing

Gross market borrowing estimated at ₹17.2 lakh crore, aiming to balance growth and fiscal prudence.

Union Budget 2026 – Stock Market Impact

The Indian stock markets (Sensex & Nifty 50) reacted sharply after the Union Budget speech, mainly due to some key fiscal policy moves:

Immediate Market Movements

The Sensex & Nifty 50 dropped significantly, with Sensex dipping thousands of points during midday trading after the budget was announced.
Banks and financial stocks saw pressure due to increased borrowing numbers and mixed sentiment.

Key Reason Behind the Market Reaction

Increase in Securities Transaction Tax (STT) on futures and options (F&O) was seen as a dampener for traders STT on futures moved from 0.02 % to 0.05 % and on options from 0.1 % to 0.15 %.
This made derivative trading costlier, impacting market liquidity and trading activity.

Sector Winners

Pharma and healthcare indices jumped, supported by the government’s biotech and bio-pharma push.

What Becomes Cheaper in Budget 2026?

One of the most asked questions this year is what gets cheaper under Budget 2026?

Items That Become Cheaper

According to official updates and budget analysis:

Cancer drugs and life-saving medicines saw lower customs duties, making them more affordable.
Foreign education and overseas tourism packages became cheaper due to policy adjustments.
Certain renewable energy equipment and manufacturing imports face lower tariffs to boost green growth.
Leather products and specific intermediate goods for industries are also cheaper due to reduced duties.

What Becomes Costlier?

Futures and options derivatives trading costs increased (due to higher STT).
Some imported luxury items and umbrella parts now cost more due to tariff changes.

Frequently Asked Questions (FAQs) – Union Budget 2026

1. What is the Union Budget 2026?

The Union Budget 2026 is India’s financial plan for FY 2026-27, presented on 1 Feb 2026 by Finance Minister Nirmala Sitharaman. It outlines revenues, expenditure, and policies guiding the economy.

2. When was the Union Budget 2026 presented?

The budget was presented on 1 February 2026 in the Parliament of India.

3. Did income tax slabs change in Budget 2026?

No, the Budget maintained existing tax slabs but introduced procedural changes for compliance and filing dates.

4. Did the stock market react negatively to Budget 2026?

Yes,markets saw volatility and sharp declines mainly due to higher transaction taxes on derivative trading and increased fiscal borrowing.

5. What items became cheaper after Budget 2026?

Essential medicines (like cancer drugs), foreign education costs, and certain industrial items became cheaper while some penalties and trading costs went up.

6.What are Revenue Budget and Capital Budget?

Revenue Budget includes routine government income (tax and non-tax) and everyday expenditure.
Capital Budget covers loans raised by the government and spending on long-term projects (like roads and railways).

7. Is the Budget the same as an Interim Budget?

No, A regular Budget is presented every year with full financial planning. An Interim Budget is presented when a new government is arriving or during elections, and it usually does not contain long-term policy changes.

8. Why does the government present the Budget on February 1?

Presenting the Budget early (usually on 1 February) gives Parliament enough time for debate and approval before the new financial year starts on April 1.