FOLLOW US: @TheStatesmanLtd @thestatesmanltd thestatesman1875 www.thestatesman.com People’s Parliament, Always in Session India’s National Newspaper since 1818 | Pages 12 | ` 5.00 | KOLKATA | Corporation Tax (18%) The Union Budget reflects the aspirations of 140 crore Indians. It strengthens the reform journey and charts a clear roadmap for Viksit Bharat. Income Tax (21%) Customs (4%) NEW DELHI | SILIGURI Borrowing and Other Liabilities (24%) MONEY COMES FROM Union Excise Duties (6%) Non-Debt Capital Receipts (2%) Non-Tax Receipts (10%) GST & other taxes (15%) | BHUBANESWAR | LUCKNOW | Defence (11%) Finance Commission and other transfers (7%) Central Sector Schemes (17%) MUMBAI Interest Payments (20%) Other Expenditure (7%) MONEY GOES TO Subsidies (6%) States' share of Taxes and Duties (22%) Pensions (2%) Centrally Sponsored Scheme (8%) Monday, 02 February 2026 TOP 10 ALLOCATIONS Transport The BJP government is anti-women, anti-poor, anti-youth, anti-SC and ST. A Budget that refuses course correction, blind to India’s real crises. Leader of Opposition in Lok Sabha 5,94,585 Rural Dev Home 2,73,108 Affairs 2,55,234 Agri. & allied Education Rahul Gandhi, Chief Minister West Bengal 5,98,520 Defence Energy Mamata Banerjee, Narendra Modi Prime Minister | Health 1,62,671 1,39,289 1,09,029 1,04,599 Urban Dev 85,522 IT & Telecom 74,560 *All figures in Rupee Crore Union Budget FY27: A balanced push for growth, reforms, and resilience amid global uncertainties JAYANTA ROY CHOWDHURY/ SHAHID K ABBAS New Delhi, 1 February F inance Minister Nirmala Sitharaman on Sunday presented her ninth annual Union Budget, outlining a comprehensive strategy to sustain India’s economic growth while navigating the challenges posed by global trade tensions and market uncertainties. Delivering a 90-minute speech, Mrs Sitharaman emphasised the government’s commitment to a “Reforms Express,” advancing transformative initiatives in technology, manufacturing, and infrastructure to secure India’s place in the global economy. Addressing Parliament, Mrs Sitharaman said: “The Modi government has decisively chosen action over ambivalence, delivering reforms that have improved lives and reduced poverty.” She framed the Budget as “a Yuva Shakti-driven Budget inspired by three duties: to accelerate economic growth, build resilience to global volatility, and ensure inclusive development.” The Budget comes at a critical juncture, against the backdrop of the US imposing 50 per cent tariffs on Indian goods last year, raising concerns over export prospects and trade stability. India’s Economic Survey forecasted growth between 6.8 and 7.2 per cent for the coming fiscal year, buoyed by domestic consumption and GST cuts. Yet, Mrs Sitharaman acknowledged the need for continued support to exporters facing challenges like order cancellations and unpaid dues. India’s fiscal framework remains ambitious. The total budgeted expenditure reaches a record Rs 53.47 lakh crore, a 9.7 per cent increase over last year, with capital expenditure pegged at Rs 12.2 lakh crore, underscoring a sustained focus on infrastructure. However, this comes with a substantial borrowing plan of Rs 17.7 lakh crore, resulting in a fiscal deficit of 4.3 per cent of GDP for FY27, only a slight improvement from 4.4 per cent in the current year. Public debt is projected at 55.6 per cent of GDP, somewhat higher than rating agencies had anticipated. Central to the Budget is a strong emphasis on reforms and capacity building in emerging and critical sectors. Mrs Sitharaman announced dedicated funds to bolster domestic manufacturing, including Rs 100 billion for the Biopharma Shakti mission and an expanded Rs 400 billion outlay for electronics production, covering semiconductors and allied industries. The government aims to reduce import dependency on critical minerals and energy, signaling a push towards enhanced energy security. Infrastructure development will be accelerated with initiatives such as 20 new waterways and coastal shipping schemes, expected to improve trade logistics and connectivity. Recognising the pivotal role of micro, small, and medium enterprises (MSMEs), the Budget proposes a three-pronged support approach. A new Rs 100 billion SME growth fund will provide capital, complemented by better liquidity mechanisms through integration of Trade Receivables Discounting System (TReDS) with the Government e-Marketplace (GeM). This is expected to ease compliance burdens and facilitate smoother business operations. On financial sector reforms, the Budget announced the creation of a high-level committee tasked with banking reforms and the restructuring of key public non-banking financial companies (NBFCs), aiming to enhance the resilience and efficiency of India’s banking ecosystem. Mrs Sitharaman indicated measured changes in taxation, focused on simplification and support rather than populist giveaways. The tax threshold for salaried employees opting for the new tax regime was raised, while the rollout of a new Income Tax Act is slated for 1 April. Tax Collection at Source (TCS) rates on education and medical expenses have been reduced, and prosecution provisions under the Income Tax Act have been rationalised to reduce compliance complexities. Notably, tax holidays for cloud services from Indian data centers have been extended until 2047, and safe harbor provisions for IT services have been enhanced, reflecting the government’s focus on leveraging technology as an economic multiplier. The Budget also prioritises inclusion with targeted schemes to promote medical tourism hubs, upgrade allied health skills, and boost sports goods manufacturing. Support for vulnerable groups, including women entrepreneurs and differently-abled individuals, has been strengthened, reflecting a broad-based approach to development. • More reports on Pages 4,5,8 and 10 Govt to boost capex to `12.2 lakh crore, push Chabahar Port gets nothing in Sitharaman’s Budget amid US-Iran tensions; aid to B’desh halved green mobility, high-speed rail and urban growth ASHOK TUTEJA New Delhi, 1 February In what is seen as a direct outcome of the United States tightening the noose around Iran, there is no provision in the General Budget of Finance Minister Nirmala Sitharaman for the strategic Chabahar Port in Iran that provides India a crucial road link to Afghanistan bypassing Pakistan. Also, India has halved the aid to Bangladesh amid the ongoing strain in ties with the neighbouring country. In the 2024-25 Budget, the Finance Minister had set aside Rs 400 crores for the project while Rs 100 crores was allocated to it in the 2025-26 Budget. In the revised estimates for 2025-26, the allocation was again increased to Rs 400 crores. However, this time around, the Finance Minister has playe d it safe amid the increasing tensions between the US and Iran and not allocated anything to the vital port project, which is aimed at increasing India’s trade links with Afghanistan and Central Asia. The decision comes amid global fears that the US could attack the Islamic nation which has witnessed large-scale anti-government protests in recent days. In September last year, the US had imposed fresh sanctions on Iran but granted a six-month waiver to India on the Chabahar project, keeping in view New Delhi’s plea that the project was meant for transporting humanitarian assistance to the war-ravaged people of Afghanistan. This exemption will end on 26 April, 2026 and India is said to be in touch with Washington in the matter. Meanwhile, the Trump administration recently announced that it will slap 25 per cent tariffs on nations engaged in trade with Iran. Since then India, which is already fighting the punitive tariff regime unleashed by the Trump administration, has been considering various options. The move comes despite the fact that India had signed a ten-year agreement in 2024 to operate the Shahid Beheshti Terminal at Chabahar, which is crucial for direct access to Afghanistan. Meanwhile, India has drastically reduced to Rs 60 crores its assistance to Bangladesh in the ‘’Aid to Countries’’ category. Bangladesh was allocated Rs 120 crores in the budget for 2025-26 but the allocation was reduced to Rs 34.48 crores in the revised estimates for that financial year. The overall allocation under “Aid to Countries” has been raised to Rs 5686 crores, some four per cent higher than last year’s revised estimates of Rs 5483 crores. STATESMAN NEWS SERVICE New Delhi, 1 February Presenting the Union Budget 2026–27 in Parliament on Sunday, Union Minister for Finance and Corporate Affairs Nirmala Sitharaman said that the government’s “first kartavya” is to accelerate and sustain economic growth by enhancing productivity and competitiveness while building resilience to volatile global dynamics. The Finance Minister announced a sharp increase in public capital expenditure, proposing an allocation of Rs 12.2 lakh crore for FY2026–27, up from Rs 11.2 lakh crore in Budget Estimates for 2025–26. She noted that public capex has risen manifold over the past decade, from Rs 2 lakh crore in FY2014–15, and has played a critical role in strengthening India’s infrastructure backbone. Highlighting the government’s focus on asset monetisation, Sitharaman said initiatives such as Infrastructure Investment Trusts (InvITs), Real Estate Investment Trusts (REITs), and institutions like the National Investment and Infrastructure Fund (NIIF) and National Bank for Financing Infrastructure and Development (NaBFID) have significantly enhanced infrastructure financing. She added that REITs have emerged as a successful instrument for monetising assets, and the Budget proposes accelerating the recycling of large real estate assets of CPSEs through the setting up of dedicated REITs. To improve private sector confidence during the infrastructure development and construction phase, the Finance Minister proposed the creation of an Infrastructure Risk Guarantee Fund. The fund will provide prudently calibrated partial credit guarantees to lenders, aimed at mitigating risks and crowding in private investment. Emphasising environmentally sustainable movement of cargo, the Budget proposes new Dedicated Freight Corridors connecting Dankuni in the East to Surat in the West. There is enough (in the Budget) to cover both election and non-election states, says FM We are laying the path and giving a push to the economy to maintain the growth momentum and for that growth momentum or sustained economic growth which we want to ensure. NIRMALA SITHARAMAN, UNION FINANCE MINISTER VIBHA SHARMA New Delhi, 1 February Finance Minister Nirmala Sitharaman presented the Union Budget on a Sunday morning this year, clad in a Kattam Kanjeevaram silk saree from Tamil Nadu. Kanjeevaram sarees are traditional handwoven silks known for their rich texture and craftsmanship. Tamil Nadu, along with Kerala, West Bengal, Puducherry, and Assam, is among the states heading to Assembly polls later this year. But this apart, there seemed no “state-specific bonanzas” for the poll-bound regions in Mrs Sitharaman’s ninth consecutive Budget, framed around “three kartavyas and seven strategic and frontier sectors.” As the BJP prepares for five Assembly polls and battles upper-caste discontent, the Union Budget surprisingly had no clear political message. The speech did not specifically address poll-bound states, allies, or the middle class. There was no income tax relief; the only measure for salaried citizens was a promise of simplified tax forms for easier compliance. The FM did not even mention West Bengal, as TMC MPs also pointed out. Maintaining a rather non-populist tone, the FM’s priority was infrastructure, manufacturing, technology, and energy security amid global headwinds such as supply chain disruptions and energy volatility. Stock markets reacted negatively, with benchmark indices Sensex and Nifty slipping after the government raised the Securities Transaction Tax (STT) on commodity futures. Responding later to media questions on the absence of special sops for election-bound states, Mrs Sitharaman said: “I think there is enough to cover all the election states. If I do, you will ask me why have I done it only for the election states. Now I have it for election and non-election states as well. You want me to spell out what has been done only for the election states, I am quite happy to do it.” Instead, she highlighted her Budget’s inclusive approach, pointing to major announcements that also benefit poll-bound states such as freight corridors for West Bengal, rare earth corridors for Tamil Nadu and Kerala, and infrastructure projects for Assam and Puducherry ~ underlining the Centre’s emphasis on equitable development across states, irrespective of political considerations. Against the backdrop of geopolitical challenges, the Budget for 2026–27 focuses on scaling up manufacturing in seven strategic and frontier sectors, including biopharma, semiconductors, and electronic components. It proposed dedicated rare earth corridors in mineral-rich states such as Odisha, Kerala, Andhra Pradesh, and Tamil Nadu to promote mining, processing, research, and manufacturing, aiming to reduce reliance on China. There is also a scheme to support states in setting up three chemical parks and strengthening the Capital Goods Capability Integrated Programme for the textile sector. For states, plans include new Dedicated Freight Corridors connecting Dankuni in the east to Surat in the west, 20 new National Waterways, a Coastal Cargo Promotion Scheme to ensure long-term energy security, and seven high-speed rail corridors ~ Mumbai-Pune; Pune-Hyderabad; Hyderabad-Bengaluru; Hyderabad-Chennai; Chennai-Bengaluru; Delhi-Varanasi; and Varanasi-Siliguri. Mrs Sitharaman cited these projects as evidence of the Budget’s inclusive framework, benefiting poll-bound states. The Budget positioned the government as a steward of its “Viksit Bharat 2047” vision, while subtly reaching out to voters in West Bengal, Tamil Nadu, Kerala, Puducherry, and Assam ahead of the 2026 Assembly elections. There were no headline-grabbing dole announcements, but schemes like the Self-Help Entrepreneur (SHE) initiative for rural women aimed to bridge urban–rural divides, observers say. West Bengal ~ ruled by the Trinamul Congress and Chief Minister Mamata Banerjee ~ was allocated enhanced freight corridors from Dankuni and improved rail connectivity, including links aligned with the Varanasi corridor. For Kerala and Tamil Nadu, rare earth projects were positioned as part of a national strategy to reduce dependence on China’s mineral dominance. Kerala also saw eco-tourism initiatives, including turtle beach conservation. In all, there were subtle boosts for West Bengal (freight corridors, high-speed rail), Tamil Nadu and Kerala (rare earth corridors), and embedding regional projects in national corridors. Sectoral announcements, like those on coconut, cashew, and sandalwood, seemed targeted at Kerala and Tamil Nadu. “We are laying the path and giving a push to the economy to maintain the growth momentum and for that growth momentum or sustained economic growth which we want to ensure. Primarily, we are looking at building the ecosystem with structural reforms, which will go on. Reforms have been carried out. We are continuing to do the reform activities,” said Mrs Sitharaman.