Budget 2026: ₹12.2 Lakh Crore Capex, Rare Earth Corridors, AI Focus & IT Boost

• Finance Minister Nirmala Sitharaman presented the Union Budget 2026, her ninth consecutive, on a Sunday, a first in a decade, outlining Modi government 3.0's long-term economic roadmap.
• Key focus areas include Artificial Intelligence, semiconductor, chip manufacturing, automobile, defense, electronics, infrastructure, manufacturing, MSMEs, railways, renewable energy, and urban development.
• New dedicated freight corridors will connect Dankuni (east) with Surat (west), and 20 new national waterways will be operationalized in five years for eco-friendly cargo movement.
• Increased outlay for Electronic Components Manufacturing Scheme (₹40,000 crore), Bio Pharma Shakti (₹10,000 crore), and support for Rare Earth Corridors in Tamil Nadu and Critical Mineral Corridors in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu.
• IT sector receives a boost with a general safe harbor margin of 15.5% for IT services, increased threshold for safe harbor benefits (₹300 crore to ₹2,000 crore), automated approvals, and a tax holiday until 2047 for foreign cloud services using Indian data centers.

Why It Matters: Budget 2026 emphasizes infrastructure, manufacturing, AI, and IT, with significant allocations and reforms for economic growth.