Markets are used to tweak in taxation and the adverse impact of the steep hike in securities transaction tax (STT) will not last long, leading bourses said on Sunday.

NSE, the largest stock exchange, feels that the move to curb volumes will not have any impact on its upcoming initial public offering (IPO) plans, its Managing Director and Chief Executive Ashish Kumar Chauhan said.

“What has been raised is the STT has been increased in a minor way. Broadly, markets are used to having STT on options and this time it has also been increased on futures but broadly, I do not see any large impact on the IPO of NSE or otherwise asset valuations in the stock market going forward,” Chauhan told PTI.

Rival BSE’s Managing Director and Chief Executive S Ramamurthy said markets react in a “bit adverse” way whenever any such changes are proposed by the government and exuded confidence that gradually things will settle down.

“This is not the first time that STT is increased. When any such move is announced, the market reaction is a bit adverse to start with and then it stabilises,” he said.

The proposal to increase the STT on futures and options will also encourage long-term equity investments, he said, adding that it may also lead to a shift of money from the arbitrage funds to banks’ fixed deposits as the returns one stands to make get on par.

The moves to hike the STT on the F&O segment was attributed as one of the key reasons that led to a sharp correction in the equity markets after the Budget speech by Union Finance Minister Nirmala Sitharaman.

It can be noted that as per studies by Sebi, over 90% of retail investors’ trades in the F&O segment lead to losses, and the capital markets regulator has also taken steps to reduce the volumes in the past.

Sitharaman announced the STT hikes, saying the move is aimed to “provide reasonable course correction” in the F&O segment in the capital market and generate additional revenues for the government.

Accordingly, she announced a proposal to raise the STT on futures to 0.05% from the present 0.02% and STT on options premium and exercise of options to be raised to 0.15% from the present rate of 0.1 per cent and 0.125%, respectively.

If the volumes go down, entities like brokerages and bourses that depend on the transactions for revenues may see a dent in their toplines, which led to the investor unease.

The BSE scrip closed the session 10% down at the end of trade on Sunday.

Both Chauhan and Ramamurthy welcomed other announcements in the Budget presented by Sitharaman earlier in the day.

Chauhan called it a fiscally disciplined and growth-oriented Budget, while Ramamurthy said it looks as capital formation along with the fiscal discipline.

The proposals on infrastructure building and also futuristic technologies like artificial intelligence were lauded by Chauhan.

Ramamurthy mentioned the Budget’s efforts to encourage investments in municipal bonds and deepen the corporate bond market, and added that the public capital expenditure will help the country in the long term by having the desired multiplier effects.

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Cigarette prices have increased by a minimum of Rs 22 to 25 per pack of 10 sticks following the implementation of additional excise duty from Sunday.

According to distributors, premium cigarettes of 76 mm length will now cost more between Rs 50 and Rs 55 per pack of 10 sticks, depending on the brand.

While manufacturers are yet to issue revised MRP declarations, distributors have begun billing old stock to retailers with 40% GST.

With wholesale markets shut on Sunday, distributors expect fresh stock with new MRP to be lifted from Monday onwards.

A packet of Wills Navy Cut (76 mm in length), a popular mid-sized cigarette, priced at Rs 95 per pack (10 sticks) are expected to cost between Rs 120 per pack, he said.

While Cigarettes with 84 mm in length, such as Gold Flake Lights, Wills Classic, Wills Classic Milds etc which are priced at Rs 170 per pack (10 sticks) are expected to cost between Rs 220 to Rs 225 per pack, he said.

Similarly, slim cigarettes as Classic Connect Cigarette (97 mm in length), priced at Rs 300 (for a pack of 20 sticks), are expected to have an MRP of Rs 350.

The distributors expect cigarette packs with new MRPs to arrive from the manufacturers by the end of the month.

“Some of the companies have already put their stocks on hold. They will start releasing after billing under new tax structures,” said a stockist.

According to AICPDF, there are around 8,000 to 9,000 stockists of Cigarettes and tobacco products in the country.

However, distributors fear that price hikes may lead to smuggling and the proliferation of counterfeit products.

All India Consumer Products Distributors Federation (AICPDF), which claims to represent over 4.5 lakh distributors and more than 1.3 crore kirana and retail outlets across India, cautioned that a sharp tax increase on legal sin products may harm the traditional, brick and mortar retail system, which are already facing a stiff competition from online platforms and quick-commerce giants.

“Tobacco products are among the few categories where small shopkeepers are still relevant. If this too is pushed into the hands of illicit networks, what will be left for honest retailers? This is not just about taxation—it is about survival,” he said.

An additional excise duty on cigarettes and tobacco products, and a health cess on pan masala, over and above the highest 40% GST rate, has come into effect from February 1.

The cess and excise levies replaced the old 28% Goods and Services Tax (GST), plus the compensation cess, on such ‘sin goods’, which had been taxed at these rates since GST was rolled out on July 1, 2017.

Under the new tax structure, short non-filter cigarettes (up to 65 mm) will attract an additional duty of about Rs 2.05 per stick, while short filter cigarettes of the same length will be charged around Rs 2.10 per stick.

Medium-length cigarettes (65-70 mm) will face an additional duty of roughly Rs 3.6-4 per stick, and long, premium cigarettes (70-75 mm) about Rs 5.4 per stick.

The highest duty of Rs 8.50 per stick applies only to unusual or non-standard designs of cigarettes, and most popular cigarette brands do not fall under this slab.

The levy of such a cess on pan masala and excise duty on tobacco was approved by Parliament in December. The GST Council, comprising finance ministers from the Centre and states, had in September 2025 decided on the mechanism to levy cess and excise duty on such products over and above GST once the compensation cess mechanism ended after repayment of loans.

The GST Council had decided that the compensation cess will cease to exist after the repayment of loans taken to compensate states for GST revenue loss during Covid. The Rs 2.69 lakh crore loan was scheduled to be repaid by January 31, 2026.

Also Read: Budget 2026 Key Highlights: Big Capex Push, STT Hike, Manufacturing Boost Lead India’s Next Growth Wave

Prime Minister Narendra Modi on Sunday described the Union Budget 2026-27 as “historic”, saying it reflected the aspirations of 140 crore Indians and strengthened the reform journey and charts a clear roadmap for Viksit Bharat.

In his televised post-budget comments on the Budget, presented by Union Finance Minister Nirmala Sitharaman in Lok Sabha, Modi also said the budget was a “highway of opportunities”.

“Today’s budget is historic. It reflects the aspirations of 140 crore Indians. It strengthens the reform journey and charts a clear roadmap for Viksit Bharat,” he said.

The prime minister said the budget reflects the empowered presence of the nation’s feminine strength. He said Sitharaman has set a new record by presenting the country’s budget for the ninth consecutive time.

Modi said this year’s budget presents an ambitious roadmap to give new momentum to the ‘Make in India’ and ‘Aatmanirbhar Bharat’ initiatives.

“This budget is the foundation for our journey towards a Viksit Bharat by 2047. This year’s budget will give India’s reform express new energy and new momentum,” he said.

The prime minister said India is not content with simply being the fastest-growing economy and the Budget strengthens the foundation of India’s bright future.

“This budget further strengthens India’s global role. The 1.4 billion citizens of India are not satisfied with being just the fastest-growing economy. We want to become the world’s third-largest economy as soon as possible. This is the resolve of millions of countrymen,” he said.

Modi said this budget embodies the vision of trust-based governance and a human-centric economic framework and it is a distinctive budget that prioritises reducing the fiscal deficit and containing inflation while balancing high capital expenditure with robust economic growth.

He also said the support that MSMEs have received in this year’s budget will give them new strength to grow from local to global.

Also Read:Union Budget 2026: What Gets Cheaper & What Gets Costlier? Check Full List

Finance Minister Nirmala Sitharaman on Sunday makes history as she presents a record ninth consecutive Budget that is expected to unveil measures to sustain growth momentum, maintain fiscal discipline, and contain reforms that could buffer the economy from global trade frictions, including US tariffs.

This will take Sitharaman closer to the record of 10 budgets that were presented by former Prime Minister Morarji Desai over different time periods. Desai presented six budgets during his tenure as finance minister from 1959 to 1964, and four budgets between 1967 and 1969.

Former finance ministers P Chidambaram and Pranab Mukherjee had presented nine and eight budgets, respectively, under different prime ministers.

Sitharaman, however, will continue to hold the record of presenting the maximum number of budgets on the trot — nine straight budgets under Prime Minister Narendra Modi.

She was in 2019 appointed as India’s first full-time woman finance minister when Prime Minister Narendra Modi won a decisive second term. After Modi came back to power in 2024 for the third time, Sitharaman continued to retain her finance portfolio.

Sitharaman took charge of the Finance Ministry on May 31, 2019, and has steered the economy through the Covid-19 pandemic and geopolitical turmoil, making India the fastest-growing major economy in the world.

Sitharaman completed six years and eight months in office on January 31, 2026. On February 1, she will present a record ninth budget in a row.

Ahead of the Budget session, Prime Minister Narendra Modi had said Sitharaman presenting the Union Budget for the ninth consecutive time “will be recorded as a matter of pride in India’s parliamentary history”.

Former prime minister Morarji Desai had presented the Union Budget on 10 occasions, while P Chidambaram presented the Budget nine times, but not for consecutive years.

The other longest-serving Finance Minister at a stretch was C D Deshmukh, who took charge of the Ministry on June 1, 1950, and remained in office for about six years and two months.

Manmohan Singh, known for pushing economic liberalisation, was Finance Minister for about five years between June 21, 1990, and June 16, 1996.

Later as Prime Minister, Singh held the additional charge of Finance portfolio for a brief period once in 2008 and again in 2012.

The first Finance Minister of Independent India was R K Shanmukham Chetty.

Here are some facts related to the Budget presentation in independent India.

FIRST BUDGET: The first-ever Union Budget of independent India was presented on November 26, 1947, by the nation’s first finance minister R K Shanmukham Chetty.

MAXIMUM NUMBER OF BUDGETS: Former Prime Minister Morarji Desai holds the record for presenting the maximum number of budgets. He has presented a total of 10 budgets during his tenure as finance minister under Prime Minister Jawaharlal Nehru and later under Prime Minister Lal Bahadur Shastri.

He presented his first Budget on February 28, 1959, full budgets in the following two years and an interim one in 1962. This was followed by two full budgets. After four years, he presented another interim Budget in 1967, followed by three full budgets in 1967, 1968, and 1969, presenting a total of 10 budgets.

SECOND HIGHEST NUMBER OF BUDGETS: Former finance minister P Chidambaram presented the Budget on nine occasions. He first presented the Budget on March 19, 1996, during the United Front government led by Prime Minister H D Deve Gowda. He presented another Budget under the same government the next year and returned to the hot seat when the Congress-led UPA came to power in 2009.

He presented five budgets between 2004 and 2008. After a stint as Union Home Minister, he was back in the finance ministry and presented budgets in 2013 and 2014.

THIRD HIGHEST NUMBER OF BUDGETS: Pranab Mukherjee presented eight budgets during his tenure as finance minister. He presented budgets in 1982, 1983 and 1984 and five straight ones between February 2009 and March 2012 in the Congress-led UPA government.

LONGEST BUDGET SPEECH: Sitharaman holds the record for the longest budget speech when her presentation on February 1, 2020, lasted two hours and 40 minutes. At the time, she cut short her speech with two pages still remaining.

SHORTEST BUDGET SPEECH: Hirubhai Mulljibhai Patel’s interim Budget speech in 1977 is so far the shortest at just 800 words.

TIMING: The Budget was traditionally presented on the last day of February at 5 pm. The timing followed a colonial era practice when the announcements could be made in London and India at the same time. India is 4 hours and 30 minutes ahead of the British Summer Time, and so presenting the Budget at 5 pm in India ensured that it was happening in the daytime in the United Kingdom.

The timing was changed in 1999 when then finance minister Yashwant Sinha in the Atal Bihari Vajpayee government presented the Budget at 11 am.

Since then budgets are presented at 11 am.

DATE: The Budget presentation date was in 2017 changed to the 1st of February to allow the government to complete the Parliamentary approval process by March-end and allow implementation of the Budget from the start of the fiscal year on April 1.

Presenting the Budget on February 28 meant that the implementation could not start before May/June after accounting for 2-3 months of the parliamentary approval process.

Also Read:Budget 2026 Live Updates: Nirmala Sitharaman Begins Lok Sabha Speech; PM Modi, Other Leaders In Attendance

Finance Minister Nirmala Sitharaman will interact with around 30 college students from different regions of the country after the presentation of the Union Budget 2026-27 on Sunday. Sitharaman is going to present her record ninth Budget including two interim budgets on February 1.

As part of this initiative, the college students will also get to witness the live presentation of the Union Budget from the Lok Sabha Gallery, offering them a chance to view one of the most significant Parliamentary proceedings of the year, the finance ministry said in a statement.

The students come from a variety of academic disciplines, including commerce, economics, medical education, and vocational courses from various States across India, it said.

The students will also visit the Ministry of Finance housed at Kartavya Bhawan-1 and interact with various senior officials to gain an understanding of the functioning of the Ministry, policy formulation processes, and the role of institutions in nation-building, it said.

Later in the evening, Sitharaman will interact with the students and engage in a free-wheeling discussion on the key priorities of the Budget, its vision for India’s future, and its implications for the youth. Students will also share their ideas, perspectives, and aspirations, and offer their views concerning the youth and the nation during the interaction, it said.

This initiative aims to provide exposure to promote greater awareness among students about finance, economics, governance, and democratic processes, while encouraging informed, constructive participation of youth in India’s financial and Parliamentary procedures, it said.

During the course of Budget preparation, various inputs have been sought from the citizens, including youth, through various platforms, which will be reflected in the upcoming Union Budget 2026-27, it added.

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India’s Economic Survey said that the country must build “strategic indispensability” as it heads into FY27, with global trade and capital flows now shaped by tariffs and economic statecraft.

The survey projects real gross domestic product growth of 6.8% to 7.2% in FY27, and puts FY26 growth at 7.4% in the First Advance Estimates, with domestic demand driving activity.

India’s macro position remains strong, it said, adding that, howver, the external setting has changed. India’s performance “has collided with a global system that no longer rewards macroeconomic success with currency stability, capital inflows, or strategic insulation,” Chief Economic Adviser V Anantha Nageswaran wrote.

The survey noted that the policy credibility and execution now act as strategic assets. It said India must “run a marathon and sprint simultaneously” to sustain growth while absorbing shocks. It also defines strategic indispensability as a position in global value chains that partners ” cannot easily substitute”, reducing the impact of coercive trade and financial measures.

Strategic Indispensability

The survey frames the global setting as less rule-based and more driven by strategic competition, with countries using trade, technology controls and other tools to pursue security goals.

India must respond by strengthening domestic capabilities, improving competitiveness, and shaping standards in areas such as digital public infrastructure, so that integration acts as “influence and insurance” rather than vulnerability, the Economic Survey noted, adding that the strategic indispensability emerges when an economy supplies goods, services or roles that matter enough to global value chains that partners cannot easily replace them.

The near-term outlook rests on domestic demand, contained inflation and healthier balance sheets, but that the external environment requires buffers, redundancy and liquidity, the survey said, calling the stance for 2026 “strategic sobriety rather than defensive pessimism.”

Growth Outlook

Noting the FY26 growth that came mainly from household spending and investment, the Economic Survey now estimates private final consumption expenditure at 61.5% of GDP in the ongoing fiscal, the highest level since 2011-12.

It reports consumption growth of 7.5% in the first half of the current fiscal, and says investment stayed firm, with gross fixed capital formation rising 7.6% in the first half.

The Survey says services remain the largest contributor on the supply side, with services growth estimated at 9.1% in FY26. It also reports a pick-up in manufacturing, with manufacturing growth estimated at 7.0% in FY26 and 8.4% in the first half.

It says an in-house nowcasting model, based on monthly indicators through December 2025, puts Q3 FY26 growth at 7%.

The Survey raises its assessment of India’s medium-term potential growth to 7%, up from the 6.5% it assessed three years earlier, citing reforms, sustained public investment and improving productivity conditions.

Inflation And Rates

The survey noted that the inflation eased sharply in FY26, supporting household purchasing power. It reports headline consumer inflation at 1.7% in April to December, driven by a fall in food prices, adding that the core inflation showed persistence mainly because of higher prices for precious metals, and that measures excluding gold and silver point to softer underlying pressures.

The Survey further noted the central bank cut the policy repo rate by 125 basis points since February 2025, and injected durable liquidity through a cash reserve ratio cut of about Rs 2.5 lakh crore, open market operations of Rs 6.95 lakh crore, and a foreign exchange swap of about $25 billion.

The banks passed the easing through to borrowers, with the weighted average lending rate on fresh rupee loans down 59 basis points and the rate on outstanding rupee loans down 69 basis points between February and November 2025, the Economic Survey said, adding that the bank balance sheets remain sound, with gross non-performing assets at 2.2% and a half-yearly slippage ratio at 0.7%.

Fiscal Path And GST Overhaul

The central government continued fiscal consolidation while maintaining capital spending, the survey noted. It reports the FY25 fiscal deficit at 4.8% of GDP, below the budgeted 4.9%, and says the government targets 4.4% in FY26.

It links fiscal consolidation to market confidence, citing a decline in the spread of India’s 10-year yield over US bonds and also noting the sovereign rating upgrades in 2025, including an S&P upgrade from BBB- to BBB.

The survey also highlighted the changes to goods and services tax, calling it the most significant overhaul since GST began in 2017.

The GST Council moved to a simplified structure with a standard rate of 18%, a merit rate of 5%, and a 40% rate for select items, with changes effective from Sept. 22, 2025. The gross GST collections in April to December 2025 reached Rs 17.4 lakh crore, up 6.7% from a year earlier. It also reports e-way bill volumes for the same period rising 21% year-on-year.

The rate changes aim to support demand and compliance, and that volume and compliance effects may help revenues hold up, the survey noted.

This is a developing story and will be updated shortly.