Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 on Sunday, marking a historic weekend session. The government announced a new scheme to help cities improve their infrastructure by raising money through bonds. The Finance Minister also proposed big changes to major power sector companies to make them work better and support the nation’s growth targets.
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Rs 100 Crore Incentive for Cities
The government has offered a direct incentive of Rs 100 crore to municipal corporations. To get this amount, a city municipal corporation must issue a single bond of more than Rs 1,000 crore. This money is meant to help big cities build better roads, water systems, and other facilities. The government wants cities to become more independent in funding their own growth, while existing support for smaller towns will continue as before.
Changes in REC and PFC
There is a new proposal to restructure REC Ltd and Power Finance Corporation (PFC). The goal is to increase their size and improve how they work as financial companies to support the ‘Viksit Bharat’ mission. The stock market welcomed this news immediately after the speech. Shares of PFC went up by 4% to 6%, and REC shares rose by 2% to 4.3% as investors showed confidence in the move.
Major Financial Updates
The budget included several important numbers for the economy and business sectors:
- Capital Expenditure: The government plans to spend Rs 12.2 lakh crore on long-term projects in FY27, which is higher than last year.
- Fiscal Deficit: The target for the fiscal deficit is set at 4.3% for the financial year 2027.
- MSME Funds: A new SME Growth Fund of Rs 10,000 crore was announced to help small businesses grow.
