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February 01, 2026 February 01, 2026 - Current affairs for all the Exams: <b>Union Budget 2026-27: Capex Hiked to ₹12.2 Lakh Crore, Focus on Infrastructure and Healthcare</b>

Finance Minister Nirmala Sitharaman presented her record <b>ninth consecutive Union Budget</b> on February 1, 2026, prioritizing infrastructure growth with a 9% hike in capital expenditure, while providing significant relief for cancer patients through customs duty exemptions and introducing a new <b>Income Tax Act</b>.

On February 1, 2026, Union Finance Minister Nirmala Sitharaman made history by presenting her ninth consecutive Union Budget, outlining a roadmap for "Viksit Bharat" (Developed India) by 2047. The budget, delivered on a Sunday, focused heavily on sustaining India’s economic momentum through infrastructure development, technological self-reliance, and targeted healthcare relief.

Key Economic Indicators and Fiscal Targets

  • Capital Expenditure (Capex): The government proposed a nearly 9% increase in public capital expenditure, raising the allocation to ₹12.2 lakh crore for FY27 to drive growth and job creation.

  • Fiscal Deficit: The fiscal deficit for FY27 is estimated at 4.3% of GDP, a reduction from the 4.4% projected for the previous year, signaling continued fiscal consolidation.

  • Dividend Revenue: The Centre expects ₹3.16 lakh crore in dividends and surpluses from the RBI and nationalized banks.

Taxation and Relief Measures

  • New Income Tax Act: A major overhaul of the direct tax system was announced, with the Income Tax Act 2025 set to take effect from April 1, 2026. While income tax slabs remained largely unchanged, the deadline for filing revised returns was extended to March 31.

  • Healthcare Relief: Basic customs duty has been exempted on 17 critical cancer drugs and medicines for rare diseases, aimed at making life-saving treatments more affordable.

  • Travel and Personal Goods: Customs duty on personal goods brought into India by travelers was slashed by 50%. Additionally, the Tax Collected at Source (TCS) on overseas tour packages was reduced to a flat 2%.

  • Market Regulation: To discourage high-risk retail trading, the Security Transaction Tax (STT) on Futures and Options (F&O) was significantly increased.

Sectoral Highlights

  • Defense: The Ministry of Defense received an allocation of ₹7.84 lakh crore, a 15.3% increase, with a strong emphasis on modernization and domestic manufacturing.

  • Railways: A record ₹2.93 lakh crore was allocated to Indian Railways, including the announcement of seven new high-speed rail corridors and a "Southern Rail Triangle" connecting Chennai, Bengaluru, and Hyderabad.

  • Technology & AI: The budget introduced a tax holiday for AI data centers and a ₹40,000 crore scheme for electronic component manufacturing to strengthen the semiconductor ecosystem.

  • Sunrise Sectors: SBI launched 'CHAKRA', a Centre of Excellence to finance critical sectors like green hydrogen, EVs, and semiconductors, which are expected to require ₹100 lakh crore in capital by 2030.

International and Social Developments

Beyond the budget, Prime Minister Narendra Modi reiterated India's support for Palestinians and discussed deepening bilateral ties with Venezuela following a shift in crude oil procurement strategies. In environmental news, India added two new Ramsar sites to its network ahead of World Wetlands Day, further strengthening its commitment to biodiversity. Meanwhile, in sports, Carlos Alcaraz defeated Novak Djokovic to clinch the Australian Open 2026 title, completing a career Grand Slam.

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