Budget 2026 Highlights: Ministry of Jal Shakti witnesses biggest spending rollback

The Union Budget 2026 has drawn sharp reactions former BharatPe co-founder Ashneer Grover, who called it a complete waste of time. Taking to X (formerly Twitter), Grover described the Budget as “Bilkul time waste,” invoking a line from his popular Shark Tank India rebuke. “This budget reminded of my rebuke on Shark Tank to one of the pitchers: ‘Bilkul time waste kiya aapne – apna bhi aur humara bhi!’” he wrote. 

Artificial intelligence is firmly at the centre of India's Budget 2026 as Finance Minister Nirmala Sitharaman announced a budgetary allocation of ₹1,000 crore to the IndiaAI Mission. The government also aims to bolster the underlying digital infrastructure required to support large-scale AI deployment. 

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It refers to the wealth-generating potential of creative industries such as animation, visual effects, gaming, and comics. Beyond the direct economic benefits, it fosters innovation, cultural expression, and social cohesion. 

By establishing AVGC Content Creator Labs in thousands of schools and colleges, the government aims to create a pipeline of skilled professionals ready to meet the projected demand for 2 million professionals by 2030.

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"The Budget 2026 push for curated and experience-led tourism products spanning from archaeological, heritage, eco and astro tourism interventions marks a significant shift on reimagining the destinations. To realize the objective, these portfolios must be supported by not only robust governance but also by strong destination marketing strategies that emphasize emotional, sensory and personalized experiences. This is essential to build distinctive destination identities, enhance visitor satisfaction, and drive repeat visits," says Kanishk Maheshwari, Co-Founder & Managing Director, Primus Partners. 

Sensex and Nifty saw a massive fall on the Sunday session after the Union Budget 2026-27 and Finance Minister Nirmala Sitharaman's proposal to hike the securities transaction tax (STT) on derivatives.

At close, Sensex fell 1,564.84 points or 1.88 per cent to 80,722.94. Nifty, on the other hand, fell 495.20 points or 1.96 per cent to close at 24,825.45. The selloff wiped out around ₹10 lakh crore in market value. Investor wealth slipped to ₹449.87 lakh crore from ₹459.88 lakh crore in the previous session. 

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"This is a disappointing budget that increases worries about the future. It is a budget that does not speak of relief. GST should have been restructured to suit value-added tax models. Just as Production Linked Incentives (PLIs) are given to corporates, a 'Value Added Incentive' should have been given to small and micro enterprises, the Association of Indian Entrepreneurs, National Chairman K E Raghunathan said.

"Despite various announcements, allocations and incentives across several sectors, it is disappointing that this budget lacks the specific announcements that the MSME industries highly expected", he said.

"The increase in STT, particularly in futures and options, is likely to act as a marginal negative for FPI flows, especially for high-frequency and derivative-focused global funds," said Aakash Shah, Technical Research Analyst at Choice Equity Broking, was quoted as saying by PTI. 

In the post-Budget press conference, Nirmala Sitharaman says STT hike in F&O aimed at deterring small investors who lose money in speculative derivative trades. Revenue Secretary Arvind Shrivastava said that even after this increase, the rates of STT will remain modest compared to the volume of transactions taking place. 

“The Union Budget 2026 continues to strengthen the foundations required for sustained economic growth. With wide-ranging reforms across sectors, the focus on manufacturing with a boost to creating Champion MSMEs, and infrastructure reflects an understanding that scale and resilience are built through stable policy and institutional support. Simplification of tax processes, decriminalisation of compliance-related provisions, and GST rationalisation will ease adherence, improve predictability for businesses, and encourage entrepreneurship. The proposal to establish dedicated Rare Earth Corridors across mineral-rich states is a timely step towards securing critical materials, strengthening domestic value chains, and reducing strategic dependencies. At the same time, targeted customs duty exemptions to support domestic manufacturing and supply-chain integration will further contribute to a more competitive, resilient economy where businesses can invest with confidence and plan for the long term," says Dr Pawan Goenka- Chairman of IN-SPACe (Indian National Space Promotion and Authorization Centre) and SCALE Committee.

“We welcome the integrated vision for the Indian textile and apparel sector outlined in the Union Budget 2026. As a sector that provides direct employment to over 45 million people and supports nearly 100 million livelihoods indirectly through allied industries and MSME clusters, these measures are both timely and impactful. The continued thrust on public capex, creation of champion MSMEs, and targeted support for labour-intensive sectors like textiles will significantly strengthen India’s global competitiveness.

The launch of SAMARTH 2.0 is a positive step towards modernising the skilling ecosystem through deeper collaboration between industry and academic institutions, while enhancing productivity across export-oriented clusters. At PDS, we are deeply committed to building a learning-driven culture through a structured three-tier learning and development framework. Our approach is anchored in the globally recognised 70-20-10 learning model, where the majority of learning takes place on the job, supported by peer and mentor interactions and formal training programmes.

Further, the Text-ECON initiative sends a strong signal of India’s ambition to emerge as a global hub for sustainable and value-added textiles. The renewed focus on PM MITRA mega textile parks, along with targeted capital support and infrastructure upgrades for traditional clusters, is expected to drive higher investments and accelerate sectoral growth. These measures will also strengthen domestic manufacturing by reducing import dependence and promoting the production of man-made fibre (MMF) apparel and technical textiles.

We believe these initiatives will also help boost exports and reduce logistics costs, further enhancing the competitiveness of Indian textiles in global markets. This Budget reinforces confidence in India’s journey towards becoming a globally integrated, high-quality manufacturing hub under the vision of Viksit Bharat," says Sanjay Jain, Group CEO, PDS Limited. 

Sripad Nandiraj, Founder and CEO, WeHouse: "The Budget sends a positive signal for the housing and home construction ecosystem through its continued push on urban infrastructure, City Economic Regions, and risk mitigation during the construction phase. Increased public capex, development of Tier II and Tier III cities, and the proposed Infrastructure Risk Guarantee Fund will help create a more stable execution environment and improve confidence across the construction value chain. Equally important is the support for MSMEs and faster liquidity mechanisms, which directly impacts contractor reliability, timelines, and cost discipline on the ground. For individual homebuilders, these measures can gradually reduce uncertainty, delays, and cost escalations that have long made home construction stressful and unpredictable." 

In a massive setback for Bangladesh, Finance Minister Nirmala Sitharaman cut assistance to Dhaka by half. Budgetary allocation for Bangladesh has been slashed to ₹60 crore in 2026-27 from ₹120 crore in the previous year's Budget. 

Moreover, she set aside no allocation for the Chabahar Port in 2026-27. New Delhi spent ₹400 crore on the strategic port in 2024-25 and budgeted ₹100 crore for the project in 2025-26. 

Also Read: Budget 2026: India cuts Bangladesh aid by half, drops Chabahar port allocation to zero

Christian de Guzman, Senior Vice President, Moody's Ratings, said

“The Union government’s proposed budget leaves India’s sovereign credit profile largely unchanged. While the government continues to demonstrate its commitment to—and a lengthening track record of—fiscal consolidation, it has targeted a narrowing of the fiscal deficit by only 0.1 percentage points of GDP in fiscal year 2026-27, the smallest pace of reduction since India emerged from the pandemic. As such, the deficit remains wider than any of those incurred during the current government’s first term in office.

In addition to the continued spending on infrastructure, the budget provides tactical support for the economy against the backdrop of prevailing external uncertainties, including the unresolved issues around US tariffs, and despite the proven resilience of economic growth over the past year. At the same time, support for the economy, which includes measures announced in recent months such as GST rationalisation, will lead to an ongoing erosion of tax revenue as a share of GDP that will worsen debt affordability as measured by interest payments relative to revenue. Moreover, we do not expect significant progress on debt reduction, which supplants deficit consolidation as the anchor for fiscal policy, leaving our broader assessment of India’s fiscal strength intact.”

Budgeted capex of Rs 12.2 lakh cr in FY27 is 4.4 pc of GDP, highest-ever: Finance Minister Nirmala Sitharaman at post-budget conference.

"This Budget is one of stability and continuity in a world where we are seeing a lot of uncertainty and change. India has emerged as a macroeconomic environment with high macroeconomic stability and controlled inflation. This Budget builds on the government's past focus areas. It places a strong emphasis on the macro view. The Reform Express continues, and manufacturing remains a high-priority area. It is pleasant to see a focus on FDI coming into India, with tax holidays for MNCs. Fiscal deficit target has been met, and it's positive to see the 4.4% figure," FICCI President Anant Goenka told news agency ANI. 

Leader of Opposition in the Lok Sabha Rahul Gandhi shared his take on the Union Budget 2026. He said that the Budget presented by Finance Minister Nirmala Sitharaman is "blind to India's real crises'". 

"Youth without jobs. Falling manufacturing. Investors pulling out capital. Household savings plummeting. Farmers in distress. Looming global shocks - all ignored," the Congress leader said.

"A Budget that refuses course correction, blind to India’s real crises," Gandhi said in a post on X.

"This Budget further strengthens India's global role. The 140 crore citizens of India are satisfied with not just being the fastest-growing economy, but we also want to be the third-largest global economy at the earliest. This is the resolve of crores of citizens of the country. As a trusted, democratic partner of the world and as a trusted quality supplier, India's role is expanding continuously. The maximum benefit of trade deals recently signed by India - Mother of All Deals, should go to the youth of India, to the small and medium scale industries of India. In this direction, major steps have been taken in the Budget," the Prime Minister said.