Budget 2026 vs 2025: What Changed, What Stayed & What It Means for India

If ‘Viksit Bharat’ was the focus of Budget 2025, Budget 2026 is no different. The announcements made by the honourable Finance Minister in Union Budget 2026 only aims to unlock India’s potential and march towards realising this vision.

Several sectors which were in focus in Budget 2025 found the spotlight in Union Budget 2026. Read on to find out what Union Budget 2026, the first to be presented on a Sunday, had on offer as against Union Budget 2025.

Fiscal Deficit Target

In the Union Budget 2025, the government targeted a fiscal deficit at 4.4% of the GDP. It was lower than the revised estimate of 4.8% of GDP in 2024-2025. In the Union Budget 2026, the government has set this target at 4.3% of the GDP.

Focus On Infrastructure Intact

Infrastructure has been the focus of the Government for quite some time now. To boost the nation’s infrastructure, the Government provided a capital expenditure of ₹11.21 lakh crores in Budget 2025.

Even in the Union Budget 2026, the focus has been on boosting the country’s infrastructure. The government has allocated ₹12.2 lakh crores in this budget to further accelerate infrastructure development.

Strengthening MSMEs

To boost MSMEs, several announcements were made in the Union Budget 2025. To help MSMEs grow and access more resources, the government had raised the investment limits by 2.5 times and the turnover limits by 2 times in Budget 2025. It also increased the credit guarantee cover for MSMEs from ₹5 crores to ₹10 crores.

Budget 2026 aims to further strengthen MSMEs. It has announced the setting up of a ₹10,000 crores growth fund for them.

New Income Tax Bill To Come Into Effect

One of the major highlights of the Union Budget 2025 was the relief provided on personal income tax. As per announcements made, an individual earning up to ₹12 lakhs was not required to pay any income tax under the new tax regime.

Add the standard deduction of ₹75,000, and salaried taxpayers were not required to pay any tax on an income of ₹12.75 lakhs under the new regime.

While no tax rate slabs were changed in the Budget 2026, the government said that the new Income Tax Bill would come into effect from 1 April 2026. The new Income Tax Bill aims to simplify taxation and reduce litigation.

Focus On Semiconductors

In the Union Budget 2025, the government allocated ₹2499.96 crores for semiconductor projects. It continued to receive attention in Budget 2026, too.

The honourable finance minister announced India Semiconductor Mission 2.0 to capitalise the momentum of the semiconductor mission. For this, she announced an outlay of ₹40,000 crores.

Setting Up Of Rare Earth Corridors

Another major highlight of the Union Budget 2026 was the setting up of rare earth corridors in India. The government announced the setting up of rare earth corridors in India’s four mineral-rich states.

These include Tamil Nadu, Kerala, Odisha, and Andhra Pradesh. The aim is to cut dependence on countries like China for rare earths.

Support For Agriculture

In the Union Budget 2025, agriculture was highlighted as one of the engines of development. Several schemes, such as Prime Minister Dhan-Dhaanya Krishi Yojana and Mission for Aatmanirbharta in Pulses were announced.

The sector continued to be in focus in Budget 2026 with more technology and value-chain orientation through Bharat-VISTAAR AI tool for farm decision-making.

Focus on Education and Skill Development

In the Union Budget 2025, the government announced major investments in education and skill development through 50,000 Atal Tinkering Labs and additional medical seats in colleges and hospitals.

Budget 2026 builds on this through announcements like setting up five university townships, one girl’s hostel in every district, and setting up content labs in 15,000 secondary schools.

Conclusion

It will not be an understatement to say that the Union Budget 2026 seeks to fulfill the aim laid out in Budget 2025. As India marches towards becoming the world’s third-largest economy, the Union Budget 2026 seeks to pave the way for an all-inclusive growth.

Sources:

PRS India
Economic Times
PIB
PIB
NDTV
Moneycontrol
Hindustan Times