Current Affairs Today — February 1, 2026

🗞️ Why in News Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 in Parliament on February 1, 2026 — the centrepiece of India’s budgetary calendar that sets fiscal, social, and economic priorities for the coming financial year. The Budget Session of Parliament opened on January 24, 2026; the Economic Survey 2025-26 was tabled on January 30, 2026.

Union Budget 2026-27: Key Fiscal Numbers

Finance Minister Nirmala Sitharaman presented her ninth consecutive Union Budget (8th full Budget — the 2024-25 Budget in July 2024 is counted as an additional one due to the election year interim Budget in February 2024). The Budget 2026-27 continues fiscal consolidation while prioritising capital expenditure, rural employment, and income tax relief.

Core Fiscal Parameters (Budget Estimates 2026-27):

• Total Expenditure: Rs 53,47,315 crore (~Rs 53.5 lakh crore) — up 7.7% over 2025-26 Revised Estimates
• Capital Expenditure: Rs 12,2 lakh crore (3.1% of GDP)
• Effective Capital Expenditure (including grants-in-aid for capex to states): Rs 17.1 lakh crore (4.4% of GDP)
• Fiscal Deficit: 4.3% of GDP (down from 4.4% in 2025-26 RE)
• Revenue Deficit: 1.5% of GDP
• Gross Market Borrowings: Rs 17.2 lakh crore; Net Market Borrowings: Rs 11.7 lakh crore
• Central Govt Debt-to-GDP: 55.6% (target: 50% by March 2031 under FRBM path)

Constitutional Basis: Article 112 of the Constitution — the Union Budget is the Annual Financial Statement. Article 110 defines a Money Bill. Article 265 — no tax shall be levied or collected except by authority of law. Finance Bill gives legal force to tax proposals.

Income Tax — New Income Tax Act 2025 and Tax Rationalisations

The headline personal income tax change in Budget 2026-27 is not new slabs — the income tax slabs under the new regime were revised in Budget 2025-26 (presented February 1, 2025) and continue unchanged for AY 2027-28. The key change in Budget 2026-27 is structural: implementation of the New Income Tax Act, 2025 from April 1, 2026, replacing the Income Tax Act, 1961 — consolidating 65 years of tax legislation into a cleaner, shorter code.

Current New Tax Regime Slabs (introduced in Budget 2025-26, continue unchanged):

Zero effective tax up to Rs 12 lakh for salaried individuals under the new regime (via Section 87A rebate). New regime is now the default regime; old regime with exemptions requires explicit opt-out.

Tax rationalisations announced in Budget 2026-27:

• LRS remittance (education/medical): TCS reduced from 5% to 2% — benefit to students studying abroad
• Overseas tour packages TCS: Uniform 2% (previously tiered 5–20%)
• MAT (Minimum Alternate Tax): Reduced from 15% to 14% — benefit to companies under old corporate tax regime
• STT (Securities Transaction Tax): Increased from 0.1% to 0.15% on certain derivatives — revenue enhancement
• Cancer drugs and rare disease medicines: Fully exempted from customs duty — major patient-relief measure
• IFSC (International Financial Services Centre) tax holiday: Extended from 10 to 20 years at 15% post-period rate
• Customs duty on personal use goods: Reduced from 20% to 10%

MGNREGS Restructured: VB-G RAM G Scheme Launched

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has been restructured into VB-G RAM G (Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission). Key changes:

• Employment guarantee increased from 100 days to 125 days per household per year
• Allocation: Rs 95,692 crore (MGNREGS allocation cut to Rs 30,000 crore, a 66% reduction in the older category)
• Adds livelihood linkages and skill convergence components beyond pure wage employment
• Constitutional basis for MGNREGS: DPSP Article 41 (right to work) and Article 43 (living wage). The scheme itself is legislated under the Mahatma Gandhi NREGS Act, 2005.

Major Sector Allocations

New Missions and Schemes Announced

• Biopharma SHAKTI Mission — Rs 10,000 crore over 5 years; biologics/biosimilars; 3 new NIPERs + 7 upgrades
• SME Growth Fund — Rs 10,000 crore for high-potential SMEs
• Electronics Components Manufacturing — Enhanced to Rs 40,000 crore (from Rs 22,919 crore)
• Container Manufacturing Scheme — Rs 10,000 crore over 5 years (new)
• CCUS (Carbon Capture, Utilization and Storage) — Rs 20,000 crore over 5 years
• City Economic Regions — Rs 5,000 crore per region; new urban growth cluster scheme
• Bharat VISTAAR — Rs 150 crore; AI-powered multilingual agricultural advisory platform
• FAST-DS 2026 — One-time 6-month foreign asset disclosure scheme
• AVGC Content Creator Labs — 15,000 secondary schools and 500 colleges
• ISM 2.0 (India Semiconductor Mission) — Equipment and materials focus; industry-led R&D

Economic Survey 2025-26 (Tabled January 30, 2026)

Chief Economic Adviser V. Anantha Nageswaran tabled the Economic Survey two days before the Budget.

Key Survey Findings:

• India Real GDP Growth FY26 (NSO First Advance Estimate): 7.4%
• GVA Growth FY26: 7.3%
• India projected Real GDP Growth FY27: 6.8–7.2%
• Average CPI Inflation April–December 2025: 1.7% (historically low — record low in any comparable period)
• Forex Reserves: USD 701.4 billion (11 months import cover)
• Gross GST Collections April–December 2025: Rs 17.4 lakh crore (+6.7% YoY)
• Gross NPA (September 2025): 2.2% (lowest in over a decade)
• Female Labour Force Participation: 41.7% (2023-24) — up from 23.3% in 2017-18
• PLI schemes: Rs 2.0 lakh crore investment; Rs 18.7 lakh crore output; 12.6 lakh jobs
• Total Exports FY25: USD 825.3 billion (+6.1%)
• Services Exports FY25: USD 387.6 billion (+13.6%; all-time high)
• Remittances: USD 135.4 billion (record)

Infrastructure Focus — Railways, Waterways, and Urban Corridors

Budget 2026-27 reinforces infrastructure as India’s primary growth driver:

• 7 High-Speed Rail Corridors — “Growth Connectors” linking major economic zones; part of the 15 HSR corridors planned under PM Gati Shakti
• Dedicated Freight Corridor Extension: Dankuni (West Bengal) to Surat (Gujarat) — extends the Eastern and Western DFC network to cover India’s manufacturing belt more fully
• 20 National Waterways to be operationalised — 111 NW declared under National Waterways Act 2016; budget to fund dredging and IWT infrastructure
• Coastal Cargo Promotion Scheme — incentivises shifting of freight from road/rail to sea along India’s 7,516 km coastline; lower carbon, lower cost
• Seaplane VGF (Viability Gap Funding) Scheme — regional connectivity via seaplanes to island/coastal destinations
• City Economic Regions (CERs) — Rs 5,000 crore per region over 5 years; cluster-based urban economic planning (new concept in Budget 2026-27)

India-Canada Relations Reset — CIMED Relaunched

Amid the broader economic diplomacy context of Budget day, the Canada-India Ministerial Energy Dialogue (CIMED) was relaunched after years of diplomatic strain following the Nijjar assassination dispute. Key announcements:

• Canada supplies 25% of India’s potash imports — critical for agriculture; supply continuity matters for fertiliser self-sufficiency
• First Canada-India Critical Minerals Annual Dialogue scheduled: March 2026, Toronto — lithium, cobalt, graphite supply chains
• Expected uranium supply agreement: CAD 2.8 billion (10-year term)
• Two-way trade target: USD 50 billion by 2030 (current: ~USD 30.9 billion)
• CEPA negotiations accelerated

UPSC Angle (GS2/GS3): India’s bilateral reset, critical minerals, potash import dependence, India-Canada relations post-Nijjar case.

16th Finance Commission — Key Recommendations

The 16th Finance Commission (Chairman: Dr Arvind Panagariya) submitted its report, with key recommendations noted alongside the Budget:

• Vertical devolution: 41% of divisible pool to states (unchanged from 15th FC)
• New horizontal formula: Added GDP contribution (10% weight) as a new criterion; removed the tax and fiscal effort parameter
• Total grants recommended (2026-31): Rs 9.47 lakh crore — rural local bodies: Rs 4.4 lakh crore; urban local bodies: Rs 3.6 lakh crore; disaster management: Rs 2,04,401 crore
• State fiscal deficit cap: 3% of GSDP; Centre target: 3.5% of GDP by 2030-31
• 308 inactive State Public Sector Enterprises (SPSEs) recommended for closure

UPSC Angle (GS2): Finance Commission role (Article 280), vertical and horizontal devolution, new GDP criterion, disaster fund corpus.

Budget Session and Parliamentary Context

• Budget Session 2026 runs in two parts: late-January to mid-March (Part I) and mid-March to May (Part II)
• Economic Survey tabled on the last working day before Budget presentation (January 30, 2026)
• Finance Bill — gives legal effect to tax proposals announced in the Budget speech
• Appropriation Bill — authorises expenditure from the Consolidated Fund of India
• Consolidated Fund of India (Article 266): all revenues received and loans raised by Government; all expenditure charged to it
• Contingency Fund of India (Article 267): operated for unforeseen expenditure; Rs 500 crore corpus; requires Parliament ratification
• Finance Commission (Article 280): determines devolution of central taxes to states; currently 16th FC under Dr Arvind Panagariya

Two New Ramsar Sites — India Reaches 98 (World Wetlands Day Eve)

On the eve of World Wetlands Day (February 2), India designated two new Ramsar wetland sites, taking the country’s total to 98 Ramsar sites — the highest in Asia and among the highest globally.

New Ramsar Sites:

1. Chhari-Dhand Wetland Complex (Kutch, Gujarat):

• Seasonal saline wetland, approximately 80 sq km at peak monsoon inundation
• Part of the Rann of Kutch ecosystem; supports the Western migratory flyway (Central Asian Flyway)
• Annual count: up to 30,000 Common Cranes as a staging ground
• Critically endangered: Sociable Lapwing (Vanellus gregarius); vulnerable: Common Pochard (Aythya ferina)
• Supports flamingoes, pelicans, and migratory waterfowl

2. Patna Bird Sanctuary (Etah district, Uttar Pradesh):

• Located in Jalesar subdivision, Etah, Uttar Pradesh (near Agra–Lucknow corridor)
• Area: less than 1 sq km — one of India’s smallest Ramsar sites
• Species richness: 178 bird species, 252 plant species
• Central Asian Flyway stopover; Important Bird and Biodiversity Area (IBA)
• Notable species: Rosy Pelican (Pelecanus onocrotalus), Eurasian Spoonbill, Northern Pintail, Oriental White Ibis
• Supports over-wintering species from Siberia and Central Asia

Context:

• Ramsar Convention (Convention on Wetlands): signed February 2, 1971 in Ramsar, Iran; in force since 1975
• India became a Contracting Party: February 1, 1982
• India total Ramsar sites: 98 (highest in Asia; China is second with 82 sites)
• Most Ramsar sites in India: Tamil Nadu (20), followed by Uttar Pradesh and Rajasthan
• World Wetlands Day theme 2026 focuses on wetland-climate nexus and blue carbon
• Blue carbon: coastal wetlands (mangroves, seagrasses, salt marshes) store carbon at 3–5 times the rate of tropical forests — emerging priority in India’s NDC framework

ExoMiner++ — NASA Open-Source AI for Exoplanet Detection

NASA released ExoMiner++, an open-source deep-learning model for identifying exoplanets from space-telescope data, making advanced planetary science tools available to researchers globally.

How ExoMiner++ Works:

• Analyses photometric light curves from space telescopes — detects dips in stellar brightness caused by a planet passing in front of its host star (transit method)
• Distinguishes genuine planetary transits from false positives: background binary stars, eclipsing binaries, instrumental artefacts
• Provides explainable AI outputs: confidence scores with reasoning pathways (not a black-box model)
• Identifies approximately 7,000 new exoplanet candidates from TESS data in initial processing

Training and Application:

• Training datasets: Kepler Space Telescope (2009–2018; discovered 2,600+ confirmed exoplanets; now decommissioned) and TESS (Transiting Exoplanet Survey Satellite; operational since 2018; covers 85% of sky)
• Future application: Nancy Grace Roman Space Telescope (launch ~2027; will survey 100 million stars)
• Open-source release enables global collaboration; reduces computational bottleneck in planetary science

UPSC Relevance:

Prelims: ExoMiner++ — NASA AI; transit photometry method; Kepler (decommissioned); TESS (operational); Nancy Grace Roman Space Telescope; 7,000 exoplanet candidates. Mains GS-3: AI applications in astronomy; open-source science tools; India’s ISRO exoplanet research context.

📌 Facts Corner — Knowledgepedia

Union Budget 2026-27 — Core Numbers:

• Total Expenditure: Rs 53,47,315 crore (~Rs 53.5 lakh crore); +7.7% over 2025-26 RE
• Capital Expenditure: Rs 12.2 lakh crore (3.1% of GDP)
• Effective Capex: Rs 17.1 lakh crore (4.4% of GDP)
• Fiscal Deficit: 4.3% of GDP (down from 4.4% in 2025-26)
• Revenue Deficit: 1.5% of GDP
• Gross Market Borrowings: Rs 17.2 lakh crore; Net: Rs 11.7 lakh crore
• Central Govt Debt-to-GDP: 55.6%; FRBM target: 50% by March 2031

Income Tax — Budget 2026-27 Key Changes:

• Slabs: NO CHANGE in Budget 2026-27 — slabs were revised in Budget 2025-26 and continue
• New Income Tax Act, 2025: Replaces IT Act, 1961 from April 1, 2026 (structural simplification, not new slabs)
• MAT: Reduced 15% → 14%
• STT on certain derivatives: Increased 0.1% → 0.15%
• IFSC tax holiday: Extended 10 → 20 years
• Cancer drugs / rare disease medicines: Customs duty = nil (full exemption)
• TCS on overseas education remittances: 5% → 2%
• Customs duty on personal use goods: 20% → 10%

New Tax Regime Slabs (introduced Budget 2025-26, continuing):

• Nil: up to Rs 4 lakh; 5%: Rs 4–8 lakh; 10%: Rs 8–12 lakh
• 15%: Rs 12–16 lakh; 20%: Rs 16–20 lakh; 25%: Rs 20–24 lakh; 30%: above Rs 24 lakh
• Zero effective tax up to Rs 12 lakh for salaried individuals (via Section 87A rebate)

Major Sector Allocations:

• Defence: Rs 7,84,678 crore (14.7% of total expenditure); Capital: Rs 2,19,000 crore (+24%)
• Railways Capex: Rs 2,93,030 crore (+10.5%)
• Agriculture: Rs 1,40,529 crore; PM-KISAN: Rs 63,500 crore
• Education: Rs 1,39,289 crore (+14%)
• Health: Rs 1,06,530 crore (+10%)

Rural Development Changes:

• MGNREGS → VB-G RAM G: employment days up 100 → 125 per household per year
• VB-G RAM G allocation: Rs 95,692 crore
• PM Awas Yojana (Grameen): Rs 54,917 crore (+69%)
• PMGSY: Rs 19,000 crore (+73%)

New Missions:

• Biopharma SHAKTI Mission: Rs 10,000 crore (5 years); SHAKTI = Strategy for Healthcare Advancement through Knowledge, Technology, and Innovation; 3 new NIPERs + 7 upgraded
• SME Growth Fund: Rs 10,000 crore
• Electronics Components Manufacturing: Rs 40,000 crore
• CCUS Mission: Rs 20,000 crore (5 years; hard-to-abate sectors: cement, steel, fertilisers)
• Container Manufacturing Scheme: Rs 10,000 crore (5 years; new)
• FAST DS 2026: Foreign Assets and Source Truthful Disclosure Scheme — 6-month amnesty for students/NRIs to disclose foreign assets Rs 1–5 crore with prosecution immunity

Economic Survey 2025-26:

• India Real GDP Growth FY26: 7.4% (NSO First Advance Estimate)
• CPI Inflation Apr–Dec 2025: 1.7% (historic low)
• Forex Reserves: USD 701.4 billion (11 months import cover)
• Female LFPR FY24: 41.7% (up from 23.3% in FY18)
• Remittances FY25: USD 135.4 billion (record)
• Services Exports FY25: USD 387.6 billion (all-time high)

Constitutional Provisions — Budget:

• Annual Financial Statement: Article 112
• Money Bill definition: Article 110
• No tax without law: Article 265
• Consolidated Fund: Article 266
• Contingency Fund: Article 267; corpus Rs 500 crore
• Finance Commission: Article 280; 16th FC Chair: Dr Arvind Panagariya

16th Finance Commission:

• Chair: Dr Arvind Panagariya; constituted under Article 280
• Vertical devolution: 41% of divisible pool to states (unchanged)
• New horizontal criterion: GDP contribution (10% weight) added; tax/fiscal effort removed
• Total grants recommended 2026-31: Rs 9.47 lakh crore (rural LBs: Rs 4.4L cr; urban LBs: Rs 3.6L cr; disaster: Rs 2,04,401 cr)
• State fiscal deficit cap: 3% of GSDP; Centre target: 3.5% of GDP by 2030-31
• 308 inactive State PSEs recommended for closure

Infrastructure Announcements:

• 7 High-Speed Rail Corridors (“Growth Connectors”): (1) Mumbai–Pune, (2) Pune–Hyderabad, (3) Hyderabad–Bengaluru, (4) Hyderabad–Chennai, (5) Chennai–Bengaluru, (6) Delhi–Varanasi, (7) Varanasi–Siliguri
• DFC extension: Dankuni (West Bengal) → Surat (Gujarat)
• 20 National Waterways to be operationalised
• Coastal Cargo Promotion Scheme; Seaplane VGF Scheme
• City Economic Regions (CERs): Rs 5,000 crore/region over 5 years

India-Canada Reset:

• CIMED (Canada-India Ministerial Energy Dialogue) relaunched
• Canada = 25% of India’s potash imports
• Critical Minerals Dialogue: March 2026, Toronto (lithium, cobalt, graphite)
• Expected uranium deal: CAD 2.8 billion (10 years)
• Trade target: USD 50 billion by 2030 (current: ~USD 30.9 billion)

Two New Ramsar Sites (Feb 1-2, 2026):

• India total Ramsar sites: 98 (highest in Asia; China has 82)
• New site 1: Chhari-Dhand, Kutch, Gujarat — seasonal saline wetland; 80 sq km; 30,000 Common Cranes; Sociable Lapwing (CR); Western migratory flyway
• New site 2: Patna Bird Sanctuary, Etah, UP — <1 sq km; 178 bird species; Central Asian Flyway; Rosy Pelican, Eurasian Spoonbill
• India joined Ramsar Convention: February 1, 1982 (signed Ramsar, Iran, February 2, 1971)
• World Wetlands Day: February 2 (anniversary of Convention signing)
• Most Ramsar sites by state: Tamil Nadu (20)

ExoMiner++ — NASA AI:

• Model type: Open-source deep learning; transit photometry method
• Detects exoplanets from stellar brightness dips in space telescope data
• Identified: ~7,000 exoplanet candidates from TESS data
• Training data: Kepler (decommissioned 2018; 2,600+ confirmed exoplanets) + TESS (operational; covers 85% sky)
• Future: Nancy Grace Roman Space Telescope (~2027 launch)

Other Relevant Facts:

• Chief Economic Adviser: V. Anantha Nageswaran (tabled Economic Survey)
• Finance Minister: Nirmala Sitharaman (9th consecutive Budget — includes interim Budget 2024)
• Budget presented to Lok Sabha as a Money Bill; Rajya Sabha can suggest but not reject
• Indian Budget shifted to February 1 presentation (from last working day of February) by Finance Minister Arun Jaitley in 2017
• FRBM (Fiscal Responsibility and Budget Management) Act, 2003 — mandates fiscal consolidation targets
• Gross GST Apr–Dec 2025: Rs 17.4 lakh crore (+6.7%)

Sources: PIB, PRS Legislative Research, TaxGuru, Drishti IAS