NEW DELHI: Union finance minister Nirmala Sitharaman is presenting the Budget for the financial year 2026–27 in the Lok Sabha during the ongoing Budget session of Parliament. This marks Sitharaman’s ninth consecutive Union Budget presentation.
FM Sitharaman announced that the capital expenditure (capex) target will be increased to Rs 12.2 lakh crore for FY27, up from Rs 11.2 lakh crore allocated in the current fiscal year.The government expects the fiscal deficit to narrow to 4.3 per cent of GDP in 2026–27, slightly lower than the 4.4 per cent projected for the current financial year. Economists generally consider a fiscal deficit of 3–4 per cent to be comfortable for a developing economy like India, as it helps balance growth requirements with financial stability.
Budget 2026
In her speech, Sitharaman said the Centre will provide Rs 1.4 lakh crore to states as tax devolution in the next financial year, while net tax receipts are estimated at Rs 28.7 lakh crore. The total size of the Union Budget has been pegged at Rs 53.5 lakh crore. The general government debt-to-GDP ratio stood at around 85 per cent in 2024, including about 57 per cent attributed to central government debt. During her speech, Sitharaman also announced that the new Income Tax Act, 2025, will come into effect from April 1, with rules and income tax return forms to be notified soon.
Here are the highlights of the Union Budget 2026-2027:
Rail corridors
Seven environmentally sustainable passenger corridors planned including Mumbai–Pune, Pune–Hyderabad, and Hyderabad–Bengaluru.
Rare earth corridors, chemical parks
The government announced three dedicated chemical parks in every state using a cluster-based plug-and-play model to enhance domestic chemical production. – Rare Earth Corridors: Four states including Odisha, Kerala, Andhra Pradesh and Tamil Nadu to establish dedicated rare earth corridors.– Chemical Parks: Support to states for three dedicated chemical parks through a challenge route on a cluster-based plug-and-play model.A large portion of the world’s rare earth refining capacity is controlled by China, who keep tightened export controls on critical minerals.
Gold, silver prices decline
Gold prices plunged sharply, dropping by nearly 20 per cent in the last two days amid extreme volatility in commodity markets, according to Multi-Commodity Exchange (MCX) data. The decline continued on Sunday, which coincided with Budget day, with 24-carat gold on the MCX falling to around Rs 1,36,185 per 10 grams. The metal had opened the session at about Rs 1,46,800 per 10 grams, highlighting persistent selling pressure and sharp intraday fluctuations. The weakness was reflected in global markets as well, with international gold prices falling by more than 9 per cent to around USD 4,887 per ounce, further weighing on domestic bullion rates.Selling pressure was also seen in the silver market. Silver prices on the MCX dropped to about Rs 2,65,900, registering a decline of nearly 9 per cent in a single trading session on Sunday. The sharp correction followed strong weekly gains recorded over the past two months.Market experts said a large number of investors had entered gold and silver trades during this period, drawn by the sustained upward momentum in prices. Much of the rally was supported by leveraged positions, which benefited from consistent weekly gains in both gold and silver.
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