0:06 Item number one. Man with Mantri Srimati Nirmala Sith Arand. Item number one. Item number one. Sir, with your permission, I rise to lay on the table a copy each of the following papers, Hindi and H English versions under article 281 of the constitution report for 26 2026 to 2031 volume 1 main report of the 16th Finance Commission. Two, report for 2026 2031 volume 2
0:57 annexures of the 16th Finance Commission. Number three, explanatory memorandum as as to the action taken on the recommendations contained in the above report. Item number two, Manitumanti Nirli Honorable speaker sir on the sacred occasion of Magurima and the birth anniversary of Guru Ravidas I present the budget for the
1:42 year 2026 2027. Since we assumed office 12 years ago, India's economic trajectory has been marked by stability, fiscal discipline, sustained growth and moderate inflation. This is the result of conscious choices we have made even in times heightened uncertainty and disruption. Our government led by honorable prime minister Modi has decisively and consistently chosen action over ambivalence, reform over rhetoric and people over populism.
2:30 We have pursued farreaching structural reforms, fiscal prudence and monetary stability whilst maintaining a strong thrust on public investment. Keeping atma as a load stop, we have built domestic manufacturing capacity, energy security and reduced critical import dependencies. Simultaneously, we have ensured that citizens benefit from every action of the government, undertaking reforms to support employment generation, agricultural productivity, household purchasing power and universal services to people. These measures have delivered a high growth rate of around 7% and helped us make
3:20 substantial strides in poverty reduction and improvement in the lives of our people. Today we face an external environment in which trade and multilateralism are imperiled and access to resources and supply chains are disrupted. New technologies are transforming production systems while sharply increasing demands on water, energy and critical minerals. India will continue to take confident steps towards vikasid bat balancing ambition with inclusion as a growing economy with expanding trade and capital needs. India must also deeply integrate.
4:06 India must also remain deeply integrated with global markets exporting more and attracting stable long-term investment. As I begin partay, I want to express my gratitude to the people for standing firmly with us as we forge our way together towards becoming one of the largest economies of the world. Our aim is to transform aspiration into achievement and potential into performance as we ensure that the dividends of growth reach every farmer, the scheduleled cast, the scheduleled
4:51 tribes, the nomads, the youth, the poor and the women. In Vikasit Bat Young Leaders Dialogue 2026, several innovative ideas were shared with our prime minister which have inspired many of the proposals making this a unique Yuba Shakidriven budget. Our government sankulp is to focus on our poor, underprivileged and the disadvantaged. To deliver on this sankulp and given that this is the first budget prepared in kartavia bhavan we are inspired by three kartabya.
5:41 Our first kertavia is to accelerate and sustain economic growth by enhancing productivity and competitiveness and building resilience to volatile global dynamics. Our second kabia is to fulfill aspirations of our people and build their capacity making them strong partners in the in India's path to prosperity. Our third kartava aligned with our vision of Sapka, Sapka Vikas is to ensure that every family, community, region and sector has access to resources, amenities and
6:26 opportunities for meaningful participation. This three-fold approach requires a supportive ecosystem. The first requirement is to sustain the momentum momentum of structural reforms. Continuous adaptive and forwardlooking. Second, a robust and resilient financial sector is central to mobilizing savings, allocating capital efficiently and managing risks. Third, cuttingedge technologies including AI applications can serve us as force multipliers for better governance. Reform Express. Our government has
7:12 undertaken comprehensive reforms towards creating employment, boosting productivity and accelerating growth. After the prime minister's announcement on Independence Day in 2025, over 350 reforms have been ruled out. This includes GST simplification, notification of labor codes and rationalization of mandatory quality control orders. High level committees have been formed and in parallel the central government is working with the state governments on deregulation and reducing compliance requirements.
7:58 The reform express is well on its way and will maintain its momentum to help us fulfill our kartava. I now move to specific proposals. Under our first kartabia to accelerate and sustain economic growth, I propose interventions in six areas. One, scaling up manufacturing in seven strategic and frontier sectors. Two, rejuvenating legacy industrial sectors. Three, creating champion MSMES. Four, delivering a powerful push for infrastructure
8:43 ensure. Five, ensuring long-term security and stability. And six, developing city economic regions, scaling up of manufacturing in seven strategic and frontier sectors. Biofarma shaky meaning biofarma strategy for health advancement through knowledge technology and innovation. India's disease burden is observed to be shifting towards non-communicable diseases like diabetes, cancer and autoimmune disorders. Biologic medicines are key to longevity and quality of life at
9:31 affordable costs. To to develop India as a global biofarma manufacturing hub, I proposed the biofarma shaki with an outlay of 10,000 crores over the next 5 years. This will build the ecosystem for domestic production of biologics and bio similars. The strategy will include a biioarma focused network with three new national institutes of pharmaceutical education and research popularly known as need nipers and upgrading seven existing ones. It will also create a network of thousand accredited India
10:18 clinical trials sites. We propose to strengthen the central drug standard control organization to meet global standards and approved time frames through uh and and approval time frames through a dedicated scientific review cader and specialists. India semiconductor mission 1.0 0 expanded India's semiconductor sector capabilities. Building on this, we will launch ISM 2.0 to produce equipment and materials, design full stack Indian IP and fortify supply chains. We will also focus on industry-led research and training centers to develop technology
11:03 and skilled workforce. The electronics components manufacturing scheme launched in April 2025 with an outlay of 22,919 crores already has investment commitments at double the targets. We propose to increase the outlay to 40,000 crores to capitalize on this momentum. A scheme for rare earth permanent magnets was launched in 2025 November. We now propose to support the mineralrich states of Odisa, Kerala, Andhra Pradesh and Tamil Nadu to
11:51 establish dedicated rare earth corridors to promote mining, processing, research and manufacturing to enhance domestic chemical production and reduction import dependency and reduce import dependency. We will launch a scheme to support states in establishing three dedicated chemical parks through challenge route on a clusterbased plugandplay model. strong capital goods. Strong capital goods capability is a determinant of productivity and quality
12:39 across different sectors. Towards building this capacity, I propose the following. High-tech tool rooms will be established by central public sector enterprises at two locations as digitally enabled automated service bureaus that locally design, test and manufacture high precision components at scale and at lower cost. Two, a scheme for enhancement of construction and infrastructure equipments will be introduced to strengthen domestic manufacturing of high value and technologically advanced CIE. This can range from lifts in a
13:24 multi-story apartment or firefighting equipment in multiplexes large or small and to tunnel boring equipments for building metros and high alitude roads. I also propose a scheme for container manufacturing to create a globally competitive container manufacturing ecosystem with a budgetary allocation of 10,000 crores over 5-year period for the labor inensive textile sector. I propose an integrated program with five subp parts. One, the national fiber scheme for self-reliance in natural fibers such as
14:10 silk, wool and jute, man-made fibers and new age fibers. Text textile expansion and employment scheme to modernize traditional clusters with capital support for machinery technology upgradation and common testing and certification centers. Three, the national handloom and handiccraft program to integrate and strengthen existing schemes and ensure targeted support for weavers and artisans. Text echo initiative to promote globally competitive and sustainable textiles and apparel. Sam 2.0 O to modernize the upgrade and
14:58 upgrade the textile skilling ecosystem through collaboration with industry and academic in institutions. Further, I propose to set up a mega textile I propose to set up mega textile parks in challenge mode. They can also focus on bringing value addition to technical textiles. I propose to launch the Mahatma Gandhi Graham Swaraj initiative to strengthen kadi handloom and handiccrafts. This will help in global market linkage and branding. It will streamline and support training, skilling, quality of
15:45 process and production. This will benefit our weavers, village industries, one district, one product, ODOP initiative and also our rural youth. India has the potential to emerge as a global hub for high quality affordable sports goods. I propose a dedicated initiative for sports goods that will promote manufacturing, research and innovation in equipment design as well as material sciences. Rejuvenation of legacy industrial clusters. I propose to introduce a
16:31 scheme to revive 200 legacy industrial clusters to improve their cost competitiveness and efficiency through infrastructure and technology upgradation creating championmemes and supporting microenterprises recognizing MSM MSMES as a vital engine of growth. I propose a three-pronged approach to help them grow as champions equity support. I propose to introduce a dedicated 10,000 croresme growth fund to create future champions incentivizing
17:17 enterprises enterprises based on select criteria. I also propose to top up the self-reliant India fund set up in 2021 with 2,000 crores to continue support to microenterprises and maintain their access to risk capital liquidity support with treads more than 7 lakh cr has been made available to MSMES to leverage its full potential. I propose four measures. One, mandate treads as the transaction settlement platform for all purchases from MSMES by
18:03 CPS serving as a benchmark for other corporates. Two, introduce a credit guarantee support mechanism through CGTMSSE for invoice discounting on trades platform. Three, link gem with treads for sharing information with financiers about government purchases from MSMES. Encouraging cheaper and quicker financing. Four, introduce Treads receivables as assetbacked securities, helping develop a secondary market, enhancing liquidity and settlement of transactions.
18:49 professional support. Government will facilitate professional institutions such as the ICAI, ICSI, ICAI to design short-term modular courses and practical tools to develop a cader of corporate mitras especially in tier 2 and tier tier three towns. These accredited para profofessionals will help MSMES meet compliance requirements at affordable costs. infrastructure. During this past decade, our government has undertaken several initiatives for large-scale enhancement of public infrastructure, including through new
19:36 financing instruments such as infrastructure investment trust in wits and real estate investment trust rates and institutions like NIF and NABFID. We shall continue to focus on developing infrastructure in cities with over five lakh population that is tier 2 tier three cities which have expanded to become growth centers. Public capital expenditure has increased manifold from 2 lakh cr in 20145 to an allocation of 11.2 2 lakh cr in B2526 in this coming year that is financial
20:25 year 202627 I propose to increase it to 12.2 two lakh crores to continue the momentum to strengthen the confidence of private developers regarding risks during infrastructure development and construction phase. I propose to set up an infrastructure risk guarantee fund to provide prudentially calibrated partial guarantee to lenders. Over the years, rights have emerged as a successful instrument for ascent monetization. I propose to accelerate recycling of significant real estate
21:13 assets of the CPSC's through the setting up of dedicated rights to promote environmentally sustainable movement of cargo. I propose to one establish new dedicated freight corridors connecting Dankuni in the east to Surat in the west. operationalize 20 new national waterways over the next 5 years. Starting with National Waterways 5 in Orisa to connect mineralrich areas of Talcher and Angul and industrial centers like Kalinga Nagar to the ports of Paradep and
21:59 Dhamra. Training institutes will be set up as regional centers of excellence for development of required manpower for these waterways. Uh this will benefit youth in the entire stretch of the waterways to train and acquire skills. Further a ship repair ecosystem catering to inland waterways will also be set up at Vanasi and Patna and C launch a coastal cargo promotion scheme for incentivizing a modal shift from rail to road to increase the share of inland waterways and coastal shipping from 6% to 12% by 204. 47.
22:50 To enhance last mile and remote connectivity and promote tourism, I propose to give incentives to indigenize manufacturing of sea planes. A seplane VGF scheme will be also introduced to provide support for operations carbon capture utilization and storage aligning with the road map launched in December 2025. The carbon capturing uh c carbon capture utilization and storage technologies at scale will achieve higher readiness uh and in end use application across five industrial
23:36 sectors including power, steel, cement, refineries and chemicals. An outlay of 20,000 cr is proposed over the next 5 years for this purpose. City economic regions cities are India's engines of growth, innovation and opportunities. We shall now focus on tier 2, tier three cities and even temple towns which need modern infrastructure and basic amenities. This budget aims to further amplify the potential of cities to deliver the economic power of a llomerations by mapping city economic regions based on their specific growth drivers. An
24:24 allocation of 5,000 cr per over 5 years is proposed for implementing their plans through a challenge mode with a reform come resultbased financing mechanism. In order to promote environmentally sustainable passenger systems, we will develop seven high-speed rail corridors between cities as growth connectors namely Mumbai to Pune, Pune to Hyderabad, Hyderabad to Bengaluru, Hyderabad to Chennai, Chennai to Bengaluru, Delhi to Vanasi, Vanasi to Siliguri.
25:20 financial sector. The Indian banking sector today is characterized by strong balance sheet, historic highs in profitability, improved asset quality and coverage exceeding 98% of villages in the country. At this juncture, we are well placed to futuristically evaluate the measures needed to continue on the path of reform-led growth of this sector. I propose setting up a highlevel committee on banking for vikasit bat highlevel committee on banking for vikasit bat to comprehensively review the sector and align it with India's next phase of
26:06 growth. while safeguarding financial stability, inclusion and consumer protection. The vision for NBFC's for Vikasid Bat has been outlined with clear targets for credit dispersement and technology adoption. In order to achieve scale and improve efficiency in the public sector NBFC's as a first step, it is proposed to restructure the power finance corporation and rural electrification corporation. I propose a comprehensive review of the foreign exchange management non-debt instruments rules to create a more
26:52 contemporary userfriendly framework for foreign investments consistent with India's evolving economic priorities. corporate bond market. I propose to introduce a market making framework with suitable access to funds and derivatives on corporate bond indices. I also propose to introduce total return swaps on corporate bonds. Municipal bonds to encourage the issuance of municipal bonds of higher value by larger cities. I propose an incentive of 100 cr rupees for a single
27:38 bond issuance. 100 cr rupees for a single bond issuance of more than 1,000 cr. The current scheme under Amrit, the current scheme under Amrit which incentivizes issuances up to 200 crores only will also continue to support smaller and medium towns will also that will also continue to support the smaller and medium towns. Ease of doing business. Individual persons resident outside India Poi will be permitted to invest in equity
28:24 instruments of listed Indian companies through the portfolio investment scheme. It is also proposed to increase the investment limit for an individual POI under the scheme from 5% to 10% with an overall investment limit for all individual PO PIS to 24% from the current 10%. Emerging technologies including AI. 21st century is technologydriven. Adoption of technology is for the benefit of all people. Farmers in the
29:09 field, women in STEM, youth keen to upskill and dive to access newer opportunities. The government has taken several steps to support new technologies through AI mission, national quantum mission, Anusand uh national research fund and research and development and innovation fund. Our second kava is to fulfill aspirations and build capacities. Close to 25 crore individuals have come out of multi-dimensional poverty through a decade of our government's sustained and reform oriented efforts.
30:01 Our government has therefore decided to place a renewed emphasis on the service sector to provide a pathway to fulfilling aspirations of a youthful India with the following measures. I propose to set up a high-powered education to employment and enterprises standing committee to recommend measures that focus on services sector as a core driver of wikiset bat. This will make us a global leader in services with a 10% global share by 2047.
30:46 The committee will prioritize areas to optimize the potential for growth, employment, and exports. They will also assess the impact of emerging technologies including AI on jobs and skill requirements and propose measures thereof to create a range of skilled career pathways a new range of skilled career pathways for our youth. I propose interventions in the following sectors. Health existing institutions for allied health professionals will be upgraded and new AHP institutions established in private and government sectors. This
31:33 will cover 10 selected disciplines including optometry, radiology, anesthesia, OT technology, applied psychology and behavioral health and add one lakh AHPs. Over the next 5 years, a strong care system covering geriatric and allied care services will be built. A variety of NSQF aligned programs will be developed to train multi-skilled caregivers combining core care and allied skills such as wellness, yoga and operation of medical assistive devices. In the coming
32:20 year, 1.5 lakh caregivers will be trained. Hubs for medical value tourism to promote India as a hub for medical tourism services. I propose to launch a scheme to support states in establishing five regional medical hubs in partnership with the private sector. These hubs will serve as integrated health care complexes that combine medical, educational and research feds facilities. They will have a centers, medical valuism facilitation centers and
33:05 infrastructure for diagnostics, post care and rehabilitation. These hubs will provide diverse opportunities, job opportunities for health professionals including doctors and AHPs. Ancient Indian yoga already respected in several parts of the world was given a mass global recognition when honorable prime minister took it to the UN. Postcoid Ayurveda gained a similar global acceptance and recognition. Exporting quality Ayurveda products helps farmers who grow the herbs and youth who process the products to meet
33:52 growing global demand. A few more steps are being taken. I propose to one set up three new allindia institutes of Ayurveda. Two, upgrade Ausharmacies and drug testing labs for higher standards of certification ecosystem and make available more skilled personnel. Three, upgrade the WH global traditional medicine center in Jam Nagar to bolster evidence-based research, training and awareness for traditional medicine. Animal husbandry
34:38 livestock contributes to close to 16% of farm income including of poor and marginal households to scale up availability of veterary professionals by more than 20,000. I propose to roll out a loan linked capital subsidy support scheme for establishment of veterary and par paravetary colleges, veterary hospitals, diagnostic laboratories and breeding facilities and private sector. Collaboration between Indian and foreign institutions will also be facilitated. Orange economy. India's animation, visual effects, gaming and comics
35:24 sector, AVGC sector is a growing industry projected to require 2 million professionals by 2030. I propose support I propose to support the Indian Institute of Creative Technologies Mumbai in setting up ABGC content creator labs in 15,000 secondary schools all over the country and 500 colleges. The Indian design industry is expanding rapidly and yet there is a shortage of Indian designers. I propose to establish through challenge route a new national
36:10 institute of design to boost design education and development in the eastern region of India. education. Our government will support states through challenge route in creating five university townships in the vicinity of major industrial and logistics corridors. These planned academic zones will host multiple universities, colleges and research institutions, skill centers and residential complexes. In a higher education, STEM institutions, prolonged hours of study and collaborate and
36:58 laboratory work pose some challenges for girl students through VGF viability gap funding and capital uh or capital support. One girls hostel will be established in every district to promote astrophysics and astronomy via via immersive experiences. Four telescope infrastructure facilities will be set up or upgraded. The National Large Solar Telescope, the National
37:44 Large Optical Infrared Telescope, the Himalayon Chandra telescope and the Cosmos 2 Planetarium. Tourism. The tourism sector has the potential to play a large role in the employment generation, forex earnings and expanding the local economy. I propose to set up a national institute of hospitality by upgrading the existing national council for hotel management and catering technology. It will function as a bridge between academia, industry and government. I also propose a pilot scheme for
38:29 upskilling 10,000 guides in 20 iconic tourist sites through a standardized highquality 12week training course in hybrid mode in collaboration with a with a with a Indian Institute of Management. A national destination digital knowledge grid will be established to digitally document all places of significance cultural, spiritual and heritage. This initiative will create a new ecosystem of jobs for local researchers, historians, content creators and
39:16 technology partners. India has the potential and opportunity to offer worldclass trekking and hiking experience. We will develop ecologically sustainable mountain trails in Himachal Pradesh, Uttarakand and Jammu Kashmir. also in Araku Valley in the eastern gards and Podiga Malay in the western guts. Turtle trails along key nesting sites in the coastal areas of Orisha, Karnataka and Kerala and three bird watching
40:02 trails along the Pulikut lake in Andhra Pradesh Tamil Nadu. It's on the border. Under the visionary leadership of honorable prime minister, we established the international big cat alliance in 2024. This year, India is hosting the first ever global big cat summit where heads and heads of governments and ministers from 95 range countries will deliberate on collective strategies for conservation, heritage and culture tourism. I propose to develop 15 archaeological sites including Lothal, Davira, Raki Gadi,
40:51 Adichanalu, Sarnat, Hastinapur and Lelay Palace into vibrant experiential cultural destinations. Excavated excavated landscapes will be open to the public through curated walkways. Immersive storytelling skills and technologies will be introduced to help conservation labs, interpretation centers and guides. The sports sector provides multiple means of employment, skilling and job opportunities. Taking forward the systematic nurturing of sports talent which is set in motion through the Kao India program. Earlier I
41:37 promo propose to launch a Kao India mission to transform the sport sector over the next decade. The mission will facilitate a an integrated talent development pathways supporting supported by training centers which are foundational, intermediate and elite levels. B systematic development of coaches and support staff. C integration of sports science and technology. D competitions and leagues to promote sports culture and provide platforms and E development of sports infrastructure for training and competition. Our third kartabia aligns with our
42:24 vision of Sapka Sapka Vikas towards Vikasit bat. This requires targeted efforts for one increasing farmer incomes through productivity enhancement and entrepreneurship with special attention to small and marginal farmers. B. Empowering Dyang Jan through access to livelihood opportunities, training and highquality assisted devices. C. Empowering the vulnerable to access mental health and trauma care. D. Focus on the Purwa estates and the northeast region to accelerate development and employment opportunities. Fisheries, we will undertake initiatives
43:10 for integrated development of 500 reservoirs and Amirit servers. Two, strengthen the fisheries value chain in coastal areas and enable market linkages involving startups and women led groups together with fish farmer producer organizations. Animal husbandry to provide quality employment opportunities in rural and perurban areas. We will support the animal husbandry sector in entrepreneurship development through A credit linked subsidy program. B scaling up and modernization of livestock enterprises. C enhance creation of livestock, dairy
43:55 and poultry. U encourage sorry I'll read that again. enhance creation of livestock, dairy and poultry focused integrated value chains and D encourage creation of livestock farmer producer organizations. High value agriculture to diversify farm outputs, increase productivity, enhance farmers incomes and create new employment opportunities. We will support high value crops such as coconut, sandalwood, cocoa, cashew in the coastal areas, agar trees in northeast and nuts such as
44:44 almonds, walnuts and pine nuts in our hilly regions. These all of them will be supported. India is the world's largest producer of coconuts. About 30 million people including nearly 10 million farmers depend on coconuts for their li livelihood. To further enhance competitiveness in coconut production, I propose a coconut promotion scheme to increase production and enhance productivity through various interventions including rep including replacing and non-productive trees with new saplings or plants or varieties in major coconut growing states.
45:31 A dedicated program is proposed for Indian cashew and cocoa to make self India self-reliant in raw cashew and coconut production and processing. Enhance export competitiveness and transform Indian cashew and Indian cocoa to premium into premium global brands by 2030. Sandalwood. >> Sandalwood is closely linked to India's social and cultural heritage. Our government will partner with state governments to promote focused cultivation and posth harvest processing to restore the glory of the Indian sandalwood ecosystem to rejerminate old
46:18 low yielding orchards and expand high density cultivation of walnuts, almonds and pine nuts. We will support a dedicated program to enhance farmer incomes and in bringing value addition by engaging youth. Barat Vistar that is virtually integrated system to access agricultural resources. I propose to launch Barat Vistar, a multilingual AI tool that shall integrate the agree stack portals and the ICAR package on agricultural practices with AI systems. This will enhance farm productivity, enable better decisions for farmers and
47:05 reduce risk by providing providing customized advisory support. She marchs for rural women-led enterprises. Building on the success of Lakpati Didi program, I propose to help women take the next step from credit linked livelihoods to being owners of enterprises. self-help entrepreneur. She Marts will be set up as communityowned retail outlets within the cluster level federations through enhanced and innovative financing instruments. Empowering Divyang Jan Dyang Jan Koshul Yojana
47:53 information technology AVGC sectors hospitality and food and beverages sectors often offer task oriented and processdriven roles which are suitable for Dyangjan. We will ensure dignified livelihood opportunities through industry relevant and customized training specific to each Dyang Jan group. Divyang Sahara Yojana timely access to highquality assistive devices for all eligible Dyangjan is a fundamental need. I propose to one support the artificial limb limbs manufacturing corporation of
48:40 India Alimco to set up and to scale up production of assisted assistive devices. Invest in R&D and AI integration. strengthen PM Diva Dyasha Kendras and supporting support setting up of assistive technology MS as modern retail retail style centers where Dyang Jan and senior citizens can see try and purchase assistive products reaffirming our commitment to mental health and trauma trauma care. There are no national institutes for mental health care in North India. We will therefore
49:25 set up a NIMHANS 2 and also upgrade National Mental Health Institutes in Ranchi and in Tespur as regional apex instit institutions. Emergencies expose families, particularly the poor and vulnerable to unexpected expenditure. We will strengthen and increase these capacities by 50% in district hospitals by establishing emergency and trauma care centers. Focus on Puroa states and northeastern regions. Puro I propose the development
50:13 of an integrated east coast industrial corridor with a well-connected node at Durapur, creation of five tourism destinations in five poor states and the provision of 4,000 e buses Buddhist sites in northeastern region. The northeastern region is a civilizational confluence of Theravada and Mahayana or Vajayana traditions. I propose to launch a scheme for development of Buddhist circuits in Arunachal Pradesh, Sikkim, Assam, Manipur, Misoram and Tripura. The scheme will cover preservation of temples and monasteries, pilgrimage
51:01 interpretation centers, connectivity and program pilgrim amenities. 16th Finance Commission on 17th November 2025. The 16th Finance Commission submitted its report to the president. As mandated under article 281 of the constitution, the government is to lay the report along with the explanatory memorandum on the action taken report on the recommendations of the commission in parliament which sir honorable speaker you've allowed me to do at the commencement of this session. The government has accepted the re recommendation of the commission to retain the vertical share of devolution at 41%.
51:50 As recommended by the commission, I have provided 1.4 lakh crores of rupees to the states for the year 2026 2027 as finance commission grants. These include rural and urban local body and disaster management grants. Finan fiscal consolidation government has been delivering on our fiscal commitments consistently without comprising compromising on social needs to strive towards accepted standards of fiscal management. In budget 2526, I had indicated that the central government would target reaching a debt
52:36 to GDP ratio of 50 plus or minus 1% by 203031. In line with this, the debt to GDP ratio is estimated to be 55.6% 6% of GDP in B2627 compared to 56.1% of GDP in RE 2526. A declining debt to GDP ratio will gradually free up resources for priority sector lending and expenditure by reducing the outgo payments. One of the main operational instruments for debt targeting is the fis fiscal deficit. I'm happy to inform this August house that I fulfilled my
53:24 commitment made in 2021 2022 to res reduce fiscal deficit below 4.5% of GDP by 2526. In RE 2526, the fiscal deficit has been estimated at par with BE of 2526 202526 at 4.4% of GDP. In line with the new fiscal prudence path of debt consolidation, the fiscal deficit in B2627 is estimated to be 4.3% of the GDP.
54:16 The revised estimates of the non-debt receipts are 34 lakh cr rupees of which the cent's net net tax receipts are 26.7 lakh cr. The revised estimate of the total expenditure is 49.6 lakh cr rupees of which the capital expenditure is about 11 lakh crores. Budget estimates 2026 to 2027. Coming to 2627, the non-debt receipts and the total expenditure are estimated as 36.5 lakh cr and 53.5 lakh cr respectively. The cent's net tax receipts are estimated at
55:04 28.7 lakh cr rupees. to finance the fiscal deficit. The net market borrowings from dated securities are estimated at 11.7 lakh cr rupees. The balance financing is expected to come from small savings and other sources. The grow gross market borrowings are estimated at 17.2 lakh cr rupees. I'll now move to part B. Part B, direct taxes. Honorable speaker, sir, I now present my proposals proposals on
55:50 direct taxes, new income tax act. In July 2024, I announced a comprehensive review of the Income Tax Act 1961. This was completed in a record time and the income tax act 2025 will come into effect from 1st April 2026. The simplified income tax rules and forms will be notified shortly giving adequate time to taxpayers to acquaint themselves with its requirements. The forms have been redesigned such that ordinary citizens can comply without difficulty. ease of living. I propose that any
56:36 interest awarded by the motor accident claims tribunal to a natural person will be exempt from income tax and any TDS on this account will be done away with. I propose to reduce TCS rate on the sale of overseas tour program package from the current 5% and 20% to 2% without any stipulation of amount. I propose to reduce TCS rate for pursuing education and for medical purposes under the liberalized remittance scheme popularly known as LRS from 5% to 2%.
57:24 Supply of manpower services is proposed to be specifically brought within the ambit of payment to contractors for the purpose of TDS to avoid ambiguity. Thus TDS on these services will be at the rate of either 1% or 2% only. I propose a scheme for small taxpayers wherein a rulebased automated process will enable obtaining a lower or nil deduction certificate instead of filing an application with the assessing officer. For the ease of taxpayer holding securities in multiple companies, I propose to enable depositories to accept form 15G or form
58:12 15H from the investor and provide it directly to various relevant companies. I propose to extend time available for revising returns from 31st December to up to 31st March with the payment of a nominal fee. I also propose to stagger the timeline for filing of tax returns. Individuals with ITR1 and ITR2 returns will continue to file till 31st July and non audit business cases or trusts are proposed to be allowed time till 31st August. TDS on sale of immovable property by a
58:58 non-resident is proposed to be deducted and deposited through resident buyers and his her or her panbased chalan instead of requiring a TAN which is a temporary accounting number to address practical issues of small taxpayers like students, young professionals, tech employees, relocated ated NAS and such others. I propose to introduce a one-time sixmonth foreign asset disclosure scheme for these taxpayers to disclose income or assets below a certain size. This scheme would be applicable for two categories of taxpayers namely A who did not disclose
59:47 their overseas income or assets and B who disclosed their overseas in overseas income and or paid due tax but could not declare the asset acquired. For category A, the limit of undisclosed income or asset is proposed to be up to 1 cr rupees. They need to pay 30% of fair market value of asset or 30% of undisclosed income as tax and 30% as additional income tax in lie of penalty and would thereby get immunity from prosecution. For category B asset value is proposed to be up to 5 crore rupees. Here
1:00:34 immunity from both penalty and prosecution will be available with a payment of fee of 1 lak rupees. Rationalizing penalty and prosecution. Multiplicity of proceedings are hindrance to the ease of doing business. I propose to integrate assessment and penalty proceedings by way of a common order for both. There will be no interest liability on the taxpayer on the penalty amount for the period of appeal before the first separate authority irrespective of the outcome of appeal process. Further quantum of prepayment is being reduced from 20% to 10% and will continue to be
1:01:19 calculated only on core tax demand. As an additional measure for reducing litigation, I propose to allow taxpayers to updo to update their returns even after reassessment proceedings have been initiated and an additional 10% tax rate over and above the rate applicable for the relevant year. The assessing officer will then use only this updated return in his proceedings. There is already a framework for immunity from penalty and prosecution in the cases of under reporting. I propose to apply this framework for immunity to misreporting too. However, in such a case, the taxpayer will need
1:02:07 to pay 100% of the tax amount as an additional income tax over the over and above the tax and interest due. Penalties for certain technical defaults such as failure to get accounts audited, non-furnishing of p transfer pricing audit report and default in furnishing statement for financial transactions are proposed to be converted into fee. I propose to rationalize prosecution framework under income tax act while maintaining a careful balance for deterrence in some serious offense.
1:02:53 Non-production of books of account and documents and requirement of tedious payment where payment is made in kind are being decriminalized. Further minor offenses will attract fine only. The remaining prosecutions will be graded commensurate with a quantum offense. They will entail only simple imprisonment with maximum imprisonment reduced to two years and power to courts to convert even those into fines. There is no penalty. There's no penalty presently for non-disclosure of non-immovable foreign
1:03:39 assets with aggregate value less than 20 lak rupees. I propose to also provide them with immunity from prosecution with retrospective effect from 110 2024. Cooperatives deduction is already allowed to a primary cooperative society engaged in supplying milk, oil, seeds, fruits or vegetables raised or grown by its members. I propose to extend this deduction to also include supply of cattle feed and cotton seed produced by its members. I propose to allow intercooperative
1:04:26 society dividend income as deduction under the new tax regime to the extent it is further distributed to its members. I further propose to allow exemption for a period of 3 years to dividend income received by a notified national cooperative federation on their investments made in companies up to 311 2026. This exemption would be allowed only for dividends further distributed to its member cooperatives. Supporting IT sector as India's growth engine. India's a global leader in software development services, IT enabled services, knowledge process outsourcing services and contract R&D
1:05:13 services. relating to software development. These businesses and their segments are quite interconnected with each other. All these services are proposed to be clubbed under a single category of information technology services with a common safe harbor margin of 15.5% applicable to all. The threshold for availing safe harbor for IT services is being enhanced substantially from 300 cr rupees to 2,000 cr rupees. Safe harbor for IT services shall be approved by an automated ruled-driven process without any need for tax officer
1:05:59 to examine and accept the application. Once supplied by an IT services company, the same safe harbor can be continued for a period of 5 years at a stretch at its choice. For IT services companies who want to conclude advanced pricing agreement APA, I propose to fasttrack unilateral APA process for IT services and endeavor to conclude it within a period of 2 years. The period of two years can be extended by a further period of 6 months on taxpayers request. I propose to extend the facility of mod modified returns available to the entity entering APA to its associated entities. Also
1:06:47 attracting global business and investment recognizing the need to enable critical infrastructure and boost investment in data centers. I propose provide I propose to provide tax holiday till 2047 to any foreign company that provides cloud services to customers globally by using data center services from India. It will however need to provide services to Indian customers through an Indian reseller entity. I also provide I also propose to provide a safe harbor of 15% on cost in case the company
1:07:32 providing data center services from India is a related entity to harness the efficiency of just in time logistics for electronic manufacturing. I propose to provide safe harbor to non-residents for component warehousing in a bonded warehouse at a profit margin of 2% of the invoice value. The resultant tax of about 0.7% will be much slower than in competing jurisdictions. to provide Philip toll manufacturing in India. I propose to provide exemption from income tax for 5 years to any non-resident who provides
1:08:18 capital goods, equipment or tooling to any tall manufacturer in a bonded zone to encourage vast pool of global talent to work in India for a longer period of time. I propose to provide exemption to global non-India sourced income of a non-resident expert for a stay period of 5 years under notified schemes. I propose to provide exemption from minimum alternate tax the MAT to all non-residents who pay tax on presumptive basis. tax administration. I propose to constitute a joint
1:09:04 committee of ministry of corporate affairs and central board of direct taxes for incorporating the requirements of income computation and disclosure standards the ICDS in the Indian accounting standards IND as IND as itself. Separate accounting requirement based on ICDS will be done away with from the tax year 2728. To support Prime Minister Modi's vision of homegrown accounting and advisory firms to become global leaders, I propose to rationalize the definition of accountant for the purposes of safe harbor rules.
1:09:49 Other tax proposals change in taxation of buyback was brought into brought into address the was brought in to address the improper use of buyback route by promoters in the interest of minority shareholders. I propose to tax buyback for all types of shareholders as capital gains. However, to dis disint incentivize however to disincentivize misuse of tax arbitrage, promoters will pay an additional buyback tax. This will make effective this will make effective tax 22% for corporate promoters. For non-corporate promoters, the effective
1:10:35 tax will be 30%. TCS rate for sellers of specific goods namely alcoholic liquor, scrap and minerals will be rationalized to 2%. And that on tendu leaves will be reduced from 5% to 2%. I propose to raise the ST on futures to 0.05% from the present 0.0. 02%. ST on options premium and exercise of options are both proposed to be raised to 0.15% from the present rate of 0.1%
1:11:21 and 0.125% respectively. We reformed the taxation landscape for corporates in 2019 by providing them a simplified regime with lower tax rate so that they could productively focus on business rather than on claim of deductions and exemptions. to encourage companies to shift to the new regime set off of broughtforward Matt credit. Minimum alternate tax credit is proposed to be allowed to companies only in the new regime. Set off using available Matt credit is proposed to be allowed to an
1:12:07 extent of 1/4 of the tax liability in the new regime. Matt is proposed to be made final tax. So there will be no further credit accumulation from 1st April 2026. In line with this change, the rate of final tax is being reduced to 14% from the current MAT rate of 15%. The brought forward VAT credit of taxpayers accumulated till 30th March 2026 will continue to be available to them for set off as above. Indirect taxes. I shall now take up
1:12:54 proposals related to indirect taxes. My proposals for customs and central excise aim to further simplify the t tariff structure, support domestic manufacturing, promote export competitiveness and correct inversion in duty to continue weeding out long continuing customs duty exemptions. I propose to remove certain exemptions on items which are being manufactured in India or where the imports are negligible. Similarly, to further simplify the process of assertaining the rate of duty applicable on a particular item, I propose to incorporate certain effective rates in
1:13:40 various customs notifications to the tariff schedule itself. I shall now take up sector specific proposals. Promotion of exports of marine, leather and textile products. I propose to increase the limit for dutyfree imports of specified inputs used for processing seafoods for export from the current 1% to 3% of FOB value of the previous year's export turnover. I also propose to allow duty-free imports of specified inputs which is currently available for exports of leather or synthetic footwear to exports
1:14:27 of shoe uppers as well. I propose to extend the time period for export of final product from the existing 6 months to one year for exporters of leather or textile garments, leather or synthetic footwear and other leather products. Energy transition and security. I propose to extend the basic customs duty exemption given to capital goods used for manufacturing lithium ion cells for batteries to those used for manufacturing lithium ion cells for battery energy so storage systems also I propose to exempt basic customs duty on
1:15:14 import of sodium antimonate for use in manufacturer of solar class nuclear power. I propose to extend the existing basic customs duty exemption on imports of goods required for nuclear power projects till the year 2035 and expanded for all nuclear plants irrespective of their capacity. critical minerals. It is proposed to provide basic customs duty exemption to the import of capital goods required for the processing of critical minerals in India. Bio gas blended CNG. I propose to
1:16:01 exclude the entire value of bio gas while calculating the central excise duty payable on bio gas blended CNG. Civil and defense aviation. I propose to exempt basic customs duty on components and parts required for the manufacturer of civilian training and other aircrafts. It is proposed to exempt basic c basic customs duty on raw materials imported for the manufacturer of parts of aircraft to be used in maintenance, repair or overall requirements by units in the defense sector.
1:16:46 Electronics to deepen value addition in the consumer electronics sector. I propose to exempt basic customs duty on specified parts used in the manufacturer of microwave ovens. Special economic zone to address the concerns arising about utilization of capacity by manufacturing units in the special economic zones due to global trade disruptions. I propose as a special one-time measure to facilitate sales by eligible manufacturing units in SCZs to the domestic tariff area at concessional rates of duty.
1:17:32 The quantity of such sales will be limited to a prescribed proportion of their exports. Necessary regulator regulatory changes will be undertaken to operationalize the measures while ensuring level playing field for the units working in the DTA. Ease of living to rationalize the customs duty structure for goods imported for personal use. I propose to reduce the tariff rate on all dutyable goods imported for personal use from 20% to 10%. To provide relief to patients, particularly those suffering from
1:18:19 cancer, I propose to exempt basic customs duty on 17 drugs or medicines. I propose also to add seven more rare diseases for the purposes of exempting import duties on personal imports of drugs, medicines and food for special medical purposes used in their treatment customs process. India's role and share in the global trade is poised for a major leap in line with our ambition and journey towards vicasit bat. In this regard, I propose many measures for custom processes to have minimal
1:19:06 intervention for smoother and faster movement of goods and greater certainty to the trade trustbased systems. I propose to enhance duty deferral period for tier 2 and tier 3 authorized economic operators known as AEOs from 15 days to 30 days. I propose to provide eligible manufacturer importers the same duty deferal facility. This should encourage them to get themselves accredited as a full-fledged tier 3 AO in due course. To provide greater certainty and for better business planning, I propose to extend validity period of advanced
1:19:53 ruling binding on customs from the present 3 years to 5 years in the spirit of the whole of government approach. Government agencies will be encouraged to leverage AEO accreditation accreditation for preferential treatment in clearing their cargo. Regular importers with trusted long long-standing supply chains will be recognized in the risk system so that the need for verification of their cargo every time can be minimized. Export cargo using electronic ceiling.
1:20:38 Export cargo using electronic ceiling will be provided through clearance from the factory premises to the ship for import of goods not needing any compliance. Filing of bill of entry by a trusted importer and arrival of goods will automatically notify customs for completing their clearance formalities. This will enable goods to be released immediately on arrival. The customs warehouse framework will be transformed into a warehouse operatorcentric system with a self declarations, electronic tracking and riskbased audit. These reforms will move away from the current system of officer dependent approvals
1:21:24 and reduce transaction delays and compliance costs. Ease of doing business approvals required for cargo clearance from various government agencies will be seamlessly processed through a single and interconnected digital window by the end of the financial year. processes involved in clearance of food, drugs, plant and animal and wildlife products accounting for about 70% of in integrated cargo will be operationalized on this system by April 2026 itself. For goods not having any compliance requirement, clearance will be done by
1:22:11 customs immediately after online registration is completed by the importer subject to the payment of duty. Customs integrated system will be rolled out in 2 years as a single integrated and scalable platform for all customs processes. The utilization of non-intrusive scanning with advanced imaging and AI technology for risk assessment will be expanded in a phased manner with the objective to scan every container across all the major ports. new export opportunities to support Indian fishermen to fully harness the
1:22:58 economic value of marine resources beyond our territorial waters. The following measures will be taken. A fish catch by an Indian fishing vessel in exclusive economic zone or on the high seas will be made free of duty. Landing of such fish on foreign port will be treated as export of goods. Safeguards will be put in place to prevent misuse during fish catch, transit or trans shshipment. To support aspirations of India's small businesses, artisans and startups to access global markets through ecommerce.
1:23:44 I am pleased to announce complete removal of the current value cap of 10 lak rupees per consignment on 4year exports. In addition, handling of rejected and returned consignments will be improved with effective use of technology for identifying such consignments. I propose to revise provisions governing baggage clearance during international travel to address genuine concerns of passengers. The revised rules will enhance duty free allowances in line with the present-day travel realities and provide clarity in temporary carriage of goods brought in or taken
1:24:29 out. There are honest taxpayers who are willing to settle disputes by paying all their dues but they get deterred due to negative connotation assoc associated with penalty. I they will now be able to close cases by paying an additional amount in lie of penalty. Honorable speaker sir with this I commend the budget to this august house. 1 and a half hours. >> Item one. >> Item number three. Maniti G.
1:25:20 >> Item number two, sir. >> Three. >> Sir, with your permission, I rise to lay on the table of the for uh table the following statements under section three one of the fiscal responsibility and budget management act of 2003 medium-term fiscal policy come fiscal policy strategy statement and macroeconomic framework statement >> item number four >> sir with your permission I move for leave to introduce the finance bill 2026 Six.
1:26:12 Sir, I introduce the bill. mobile phone or member. Portals.
