The Indian banking sector is heading for a major change with the Finance Minister Nirmala Sitharaman proposing to set up a ‘High Level Committee on Banking for Viksit Bharat’ to enable this sector lend differently. 

She said the committee will comprehensively review the financial sector and align it with India’s next phase of growth, “while safeguarding financial stability, inclusion and consumer protection.” 

“Indian banking sector today is characterised by strong balance sheets, historic highs in profitability, improved asset quality and coverage exceeding 98% of villages in the country,” she said while presenting the Union Budget 2026-27 in the Parliament. 

“High Level Committee to reform banks to suit, “Viksit” Bharat is a clear call to privatisation of public sector banks. Private banks work for profit and not priority-sector lending, rural credit access, and financial inclusion areas where public banks historically play a stabilising role,” said Amarjeet Kaur, General Secretary, All India Trade Union Congress said in a statement.

“The Finance Minister mentioned about rural branches in 98% villages, but does not recognise that this was possible because of Nationalised Banking,” she added.

Also keeping the future requirement in mind the budget has proposed to restructure the Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) to achieve scale and improve efficiency in the Public Sector NBFCs.

Abhishek Nath, Sector Head for Energy and Power at the think-tank CSTEP, said the move would help NBFCs align with present requirements. “Today, we have to look at various technologies, including RE and nuclear generation, as well as transmission and storage,” he stated, adding, “Although both institutions are mainly finance organisations and have been flexible enough to survive and prosper, a relook at their basic structure is in keeping with the evolving needs of the present time,” he said.

The budget proposal has outlined the vision for NBFCs for developed India with clear targets for credit disbursement and technology adoption.

The FM also proposed a comprehensive review of the Foreign Exchange Management (Non-debt Instruments) Rules in the Union Budget to create a more contemporary, user-friendly framework for foreign investments consistent with India’s evolving economic priorities.

The Budget has proposed measures to allow individuals present outside India to invest in equity instruments of listed Indian companies through the portfolio investment scheme. 

Finance Minister Nirmala Sitharaman, during her Budget speech, announced seven high-speed rail corridors, which will connect five South Indian states among others, and will be developed at a total cost of ₹16 lakh crore.

Calling them “growth connectors”, the FM said the corridors will link Mumbai- Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi, and Varanasi-Siliguri.

Read: Union Budget 2026 LIVE updates

The corridors will reduce travel time between Chennai to Bengaluru to 1.5 hours, Bengaluru to Hyderabad to 2 hours, Hyderabad to Chennai to 2 hours and 55 minutes. The travel duration between Pune and Hyderabad will reduce to 1 hour 55 minutes; and between Pune to Mumbai it will reduce to 45 minutes.

At a press conference, Union Railway Minister Ashwini Vaishnaw explained that with five South Indian States interlinked, the announcement will serve as a growth multiplier for them.

The Delhi-Varanasi corridor will bring down travel time to 3 hour 50 minutes. Varanasi to Siliguri via Patna will be covered in 2 hour 55 minutes.

These corridors will be of 4000 km in length, and be developed at an outlay of ₹16 lakh crore.

The FM also announced a new dedicated freight corridor connecting Dankuni in West Bengal to Surat in Gujarat.

WATCH | Seven high-speed rail corridors to promote environment friendly transport: FM

A total outlay of ₹2,78,030 crore has been set aside for the Ministry of Railways in the Union Budget 2026-27 as compared to ₹2,55,466 lakh in the revised estimate of Financial Year 2025-2026, indicating a hike of 10.8%. The total capital expenditure for railways is at ₹2,93,030 crore.

Rail Minister said a sum of ₹1,20,000 crore has been earmarked on safety related measures such as track maintenance, locomotives, coaches as rapid installation of Kavach ( indigenously developed Automatic Train Protection (ATP) system) and overhead electricals.

The Ministry of Road Transport and Highways has been granted a total capital expenditure of ₹3.09 lakh crore for financial year 2026-27 as compared to ₹2.87 lakh in the revised estimate of the current fiscal, a hike of 10.7%.

Allocation to state-owned National Highways Authority of India (NHAI) has been increased to ₹1.87 lakh crore from last year’s ₹1.70 lakh crore.

 

The Union Budget has removed Basic Customs Duty on quite a range of products but also raised the duty on some. It also envisions simplification of the Customs procedures, moving into “Trust based systems” for ease of doing business.

Also read | Union Budget 2026 LIVE

The basic customs duty on potassium hydroxide will go up to 7.5 % from nil, increasing input costs for industries such as chemicals, soaps, detergents, and batteries unless there is adequate domestic availability. The duty on umbrellas (other than garden umbrellas) has been revised from a flat 20% to 20% or ₹60 per piece, whichever is higher, in a move to curb low-priced imports.

Duties on umbrella parts, trimmings, and accessories will go up to 20% from 11%, or ₹25 per kg, whichever is higher, raising the cost for domestic assemblers using imported inputs.

All dutiable goods imported for personal use will see a reduction of duty from 20% to 10%. For chewing tobacco and Jarda-scented tobacco, the National Calamity Contingent Duty will be increased to 60% from 25% from May 1. However, effective duty rate on these products will remain unchanged.

The Global Trade Research Initiative report says that the Budget, though country-neutral, improves market access prospects for U.S. exporters across several high-value sectors.

The Finance Minister Nirmala Sitharaman has also proposed to increase the limit for duty-free import of specified inputs used for processing seafood products for export, from the current 1 % to 3 % of the FOB value of the previous year’s export turnover.

The Minister also said that duty-free imports will be allowed of specified inputs (which is currently available for exports of leather or synthetic footwear) for export of shoe uppers too. The time period for export of final product under the Advance Authorisation scheme has been extended to one year from six months for export of leather or textile garments, leather or synthetic footwear and other leather products.

For better use of capacities of manufacturing units in Special Economic Zones that are hit by global trade disruptions, there will be a one time measure of concessional duty to facilitate sales to sell in the Domestic Tariff Area limited to a prescribed proportion of their exports. Measures will be taken to ensure that the units in the domestic tariff area will not be affected.

Customs Integrated System and cargo clearance

For 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, animal and wild life products, accounting for around 70% of interdicted cargo, will be operationalised on this system by April this year.

The duty deferral period for tier-two and tier-three Authorised Economic Operators will be increased to 30 days and eligible manufacturer-importers will also get the duty deferral facility. The validity period of advance ruling, binding on Customs, will be increased from the present three years to five years.

Regular importers with trusted long-standing supply chains will be recognised in the risk system, so that the need for verification of their cargo can be minimised. Export cargo using electronic sealing will be provided through clearance from the factory to the ship.

For import of goods that do not require any compliance, filing of bill of entry by a trusted importer, and arrival of goods will automatically notify Customs for completing their clearance formalities. The Customs warehousing framework will be transformed into a warehouse operator-centric system with self-declarations, electronic tracking, and risk-based audit.

Customs Integrated System will be rolled out in two years as a single, integrated and scalable platform for all the customs processes.

To support aspirations of India’s small businesses, artisans and start-ups to access global markets through e-commerce, the current value cap of ₹10 lakh per consignment on courier exports will be removed. Handling of rejected and returned consignments will be improved with effective use of technology for identifying such consignments.

Union Finance Minister Nirmala Sitharaman on Sunday (February 1, 2026) earmarked ₹20,000 crore in the Budget towards Carbon Capture Utilisation and Storage (CCUS) – a nascent, esoteric stream of research globally, but mooted as necessary to countries’ quest for a zero-carbon future.

CCUS refers to a suite of technologies that capture carbon dioxide (CO₂) emissions from large point sources – such as power plants, steel, cement, chemicals, and refineries – and either use CO₂ as an input for products or permanently store it in geological formations.

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Under the aegis of the Principal Scientific Advisor, an expert committee of the Department of Science and Technology (DST) had submitted a report in December 2025 to analyse what India needed to do regarding CCUS to aid meeting its net-zero goals for 2070. Net zero refers to no net carbon emissions.

The road map

The DST road map positions CCUS as essential for India’s “hard-to-abate” sectors (for instance, iron and steel industries) where deep emissions reductions are difficult through efficiency or renewable substitution alone. Reducing carbon emissions from these sectors has acquired urgency in the light of measures by the European Union to impose indirect tariffs on imports from countries that use higher carbon than its domestic manufacturers to forge iron and steel products.

India’s approach, as outlined by the DST, is explicitly research and development-led rather than deployment first. The road map proposes a three-phase programme focused on pushing CCUS technologies from laboratory scale to pilot and demonstration projects, and eventually to commercial readiness. It prioritises point-source capture – especially from cement, steel, fertilisers, and power generation – and emphasises indigenous technology development, centres of excellence, and shared transport and storage infrastructure. Integration of CCUS into existing industrial facilities – rather than greenfield plants – is a central design principle.

The anticipated costs, according to this estimate, would be around ₹4,500 crore over the next two years. Another tranche of ₹2,000 crore would be needed for demonstration products and geological storage would cost another ₹3,000 crore, the document notes.

An initial allotment of ₹500 crore has been made to the Ministry of Power to commence the research programme.

Move welcomed

Independent experts broadly welcomed the stress on CCUS in the Budget. “The ₹20,000-crore commitment over five years for CCUS, continued support for the National Green Hydrogen Mission, and the introduction of new financial mechanisms for battery energy storage systems and pumped storage together signal a pragmatic approach to addressing emissions from hard-to-abate sectors,” said Arunabha Ghosh, CEO, Council for Energy, Environment and Water.

According to the International Energy Agency, around 45 commercial facilities are already in operation applying CCUS to industrial processes, fuel transformation, and power generation. 

CCUS deployment has trailed behind expectations in the past, but momentum has grown substantially in recent years, with over 700 projects in various stages of development across the CCUS value chain.

In 2023, announced capture capacity for 2030 increased by 35%, while announced storage capacity rose by 70%. This brings the total amount of CO₂ that could be captured in 2030 to around 435 million tonnes (MT) per year and announced storage capacity to around 615 MT of CO₂ per year.