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Below the Union Budget 2026 reactions on Semiconductors, Public Spending, Biopharma Shakti Mission, Capital Markets, Personal Finance/Direct Taxation, MSME Sector by Dhruv Chopra

On Semiconductor :

"With the allocation of Rs 40,000 crore for manufacturing electronics components, furthering the India semiconductor mission - India is moving beyond chip assembly to build a complete, self-reliant semiconductor ecosystem. This strategic investment targets the high-value supply chain—including specialized materials and equipment—that currently accounts for a massive portion of our imports. By incentivizing domestic production of these core elements, the mission aims to double local value addition and secure India's position as a global nerve center for high-tech manufacturing."

On Public spending:

"The most critical impact of public spending is the Fiscal Multiplier. Every Rs1 spent by the government on infrastructure (roads, railways, ports) results in an increase of Rs 2.5 to Rs 3.5 in the overall GDP over the medium term. In contrast, money spent on subsidies or salaries has a lower multiplier, often around 0.9 to 1.0. So A Rs 12.5 lakh crore investment in infrastructure could theoretically boost the GDP by Rs 31.25 lakh crore to Rs 43.75 lakh crore as it circulates through the economy which is a significant boost"

Pharma Sector:

"The allocation of ?10,000 crore toward the Biopharma Shakti mission marks a decisive pivot from India's legacy as a 'pharmacy of the world' for generics to a global leader in high-value biologics. By funding the creation of 1,000 accredited clinical trial sites, this budget addresses the critical infrastructure gap between laboratory innovation and commercial manufacturing. This investment into deep-tech biopharmaceuticals, like mRNA and gene therapies, will not only drive down costs for life-saving treatments and non communicable diseases domestically but also secure India's position in the next frontier of global healthcare. It is a strategic move that ensures that 'Made in India' biologics are synonymous with global quality."

Capital Market:

"In a bold push for market liberalization, the Union Budget 2026–27 has significantly raised the ceiling for individual foreign capital entering the Indian equity markets. The individual investment limit for Persons Resident Outside India (PROI) has been hiked from 5% to 10%, while the total aggregate cap for all individual PROIs in a single company has surged from 10% to 24%.
This regulatory shift is designed to reduce the market's reliance on volatile institutional "hot money" by courting stable, long-term individual investors. By more than doubling the aggregate capacity, the government is providing a liquidity boost to mid-cap and small-cap firms that were previously sidelined by institutional players. This deeper integration with global markets not only simplifies the compliance burden but also offers the Indian diaspora a more robust pathway to participate in the nation’s growth. Ultimately, the move signals a maturing economy ready to align its capital market rules with international standards, ensuring a more resilient and efficient financial ecosystem for all stakeholders"

Personal Finance - TCS under the Liberalized Remittance Scheme (LRS)

"In a move aimed at easing the financial burden on the middle class and students, the Union Budget 2026–27 has formally implemented the increase in the Tax Collected at Source (TCS) threshold for the Liberalized Remittance Scheme (LRS). The exemption limit has been raised from Rs 7 lakh to Rs 10 lakh per financial year, meaning no tax will be collected upfront on most foreign remittances within this limit. This change significantly improves cash flow for families managing overseas expenses, as funds are no longer "locked" in the tax system until a refund is filed.
Furthermore, the budget has completely abolished TCS on education remittances funded by loans from specified financial institutions, regardless of the amount. For self-funded education and medical treatments, a lower TCS rate of 5% applies only on the amount exceeding the Rs10 lakh threshold. Other discretionary remittances, such as overseas investments or gifts, now attract a 20% TCS once the new ceiling is breached."

Direct Taxation:

"In a move aimed at enhancing taxpayer convenience and reducing compliance-related stress, Union Finance Minister Nirmala Sitharaman proposed extending the time limit for revising income tax returns from 31st December to 31st March, subject to payment of a nominal fee. She further announced a staggered approach to return filing timelines to ensure smoother compliance. Under the proposal, individuals filing ITR-1 and ITR-2 will continue to have a deadline of 31st July, while non-audit business cases and trusts will be permitted additional time, with a revised deadline of 31st August. The measures are intended to ease the filing process, improve accuracy, and distribute compliance workload more evenly."

Simplified TDS process for NRI property sales:

"FM has proposed that TDS on the sale of immovable property by non-residents will now be deducted and deposited through resident buyers using their PAN-based challan, eliminating the need for a TAN (temporary accounting number) and simplifying compliance. Accordingly, the tds will be lower than existing rates of 20%\12.5% depending on different facts. This will bring much relief to NRIs on assets they have inherited in India as ease exit process while protecting revenue and ensuring compliance for the department."

On MSME sector:

"The Union Budget 2026–27 has introduced a number of "growth funds" specifically designed to provide high-risk capital and equity support to emerging and small-scale industries. This will promote and enable new ideas being developed by the “future champions of India” - our youth. Instead of traditional loans, these funds focus on equity infusion, ensuring that businesses have the patient capital needed to scale without the immediate burden of debt. The SME Growth Fund (Rs10,000 Crore) is the centerpiece for small businesses in this budget. It is designed to identify and support "Future Job Champions." Facilitating and promoting creation of small businesses which are tomorrows large cap businesses generating jobs, state of the art products and driving positive change."

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