Finance minister Nirmala Sitharaman presented her ninth Budget in the Lok Sabha today, February 1. This speech comes in the backdrop of global uncertainties, a shakeup of the world order under US President Donald Trump, a rupee at its worst health, and a slowdown in exports.
Here are a few points of note from the speech.
1) Sitharaman’s budget speech was a little shy of one-and-a-half hours. Congress MP Jairam Ramesh has noted that while the documents which have now been uploaded need to be studied in detail, “It is clear after 90 [minutes] that Budget 2026/27 falls woefully short of the hype that was generated about it.”
Calling the speech “lacklustre,” Ramesh noted that he speech was non-transparent – “since it gave no idea whatsoever of budgetary allocations for key programmes and schemes.”
Indeed, while Sitharaman’s speech had the details on plans and outlays for peripheral schemes and the government’s goals, it did not mention key schemes and programmes at all. These outlays were, however, essayed in the uploaded PDFs.
2) The finance minister announced the ‘India Semiconductor Mission 2.0’ and said that it will help “capitalise on the momentum of the semiconductor mission.”
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Sitharaman said that the focus will be on industry-led research and training centres so that India can produce equipment and materials designed for full-stack Indian IP.
The Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem in India will get Rs 8000 crore. The India Semiconductor Mission 2.0 has an allocation of Rs 1000 crore.
It has been reported how India’s semiconductor push has been relatively late and depends on a near-total dependence on imports.
3) Ahead of the Budget speech in parliament, Congress leader Rahul Gandhi called for parliament to take up air pollution as a matter of urgency, saying it has turned into a national health emergency that requires immediate government action and financial backing. The speech, however, had no mention of air pollution. The finance minister has proposed an outlay of Rs 20,000 crore for the launch of carbon capture efforts and utilisation across sectors like steel and cement.
4) Sitharaman said that in July 2024, the Union government began its review of the old income tax rules. On April 1, a new Income Tax Act 2025, will be in force. Simplified rules will be out shortly, said Sitharaman.
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5) The 16th Finance Commission has recommended – and the government has accepted – the retention of the vertical share of devolution at 41%.
The commission recommended Rs 1.4 lakh crore to the states for 2026-27 in the form of finance commission grants, Sitharaman said.
6) With an eye on gaming and content creation, Sitharaman announced plans to set up “Content Creator labs” in 15,000 schools across India and establish five university townships near industry corridors to promote skill development and innovation. Ahead of the Bihar assembly polls, PM Modi had said that youth in the country are earning money by making reels.
While the focus on skill development sounds good on paper, the Modi government’s previous efforts have not been particularly fruitful. A recent CAG report, for instance, found an overall placement rate of just 41% and Rs 277.40 crore funds unutilised. Read more about it here.
7) The Union Budget is being presented after a year in which the Modi government has enfeebled the world’s biggest rural employment jobs guarantee. Many had expected this announcement to be the first test of whether the government is willing – or able – to back its claims of an alternative employment guarantee. However, Sitharaman’s speech did not find mention of the controversially named VB G RAM G Bill that replaced the MGNREGS.
In cities, India battles a remarkable lack of jobs and an over-reliance on the gig economy.
8) Fibres and textile expansion are to be the focus of an employment scheme, said the finance minister. The plan is to have several prongs for textile spinning ecosystem and upskilling. A mega textile path is to be set-up, along with technical textiles. The Mahatma Gandhi Gram Swaraj Initiative will boost khadi handicrafts, Sitharaman said.
9) Sitharaman said that the fiscal deficit is pegged at 4.3% of GDP in FY’27, lower than 4.4% in FY’26.
Also Read: Fiscal Math and Tax Tweaks of Budget 2026 https://www.vibesofindia.com/fiscal-math-and-tax-tweaks-of-budget-2026/
