Budget focusses on investment as tool to boost consumption: FM

New Delhi: Finance Minister Nirmala Sitharaman on Monday said the Union Budget for FY2026-27 has focussed on investment as a priority tool for boosting consumption, and the trajectory of fiscal deficit shows that the government’s priority is growth.

Interacting with the media after the 2026-27 Budget presentation, Sitharaman also said the volatility in gold prices is due to global uncertainty, and many central banks are investing in gold.

“It also shows that investors do not have confidence in any one particular currency. and hence the rush to buy gold,” Sitharaman said.

Talking about hike in securities transaction tax (STT) on F&O trades, the minister said it is a “sort of deterrence so that people do not go headlong in speculative” derivative trading.

The Budget has proposed an increase in STT on futures contracts to 0.05 per cent from 0.02 per cent. STT on options premium and exercise of options are proposed to be raised to 0.15 per cent from the present rate of 0.1 per cent and 0.125 per cent, respectively.

According to studies by Sebi, over 90 per cent of retail investors’ trades in the F&O segment lead to losses, and the capital markets regulator has also taken steps to reduce volumes in the past.

“We have only touched the F&O trade which is highly speculative. I have received calls from many parents saying their children are severely losing money, and also seeking government intervention. The STT hike in F&O will act as a deterrence so that people do not go headlong with that,” Sitharaman said.

Continuing on the path of fiscal consolidation, the Budget has pegged fiscal deficit at 4.3 per cent of GDP for the next fiscal year, as against 4.4 per cent for the financial year ending March 2026.

Sitharaman said the fiscal deficit target has to depend on each year’s economic situation and in the past the government has pegged fiscal deficit a couple of basis points lower than the previous fiscal year.

This fiscal with the “government’s priority being growth, I am comfortable with 4.3 per cent deficit target. We will see how it goes,” Sitharaman said.

She also said the pace of disinvestment and asset monetisation will continue. The government will encourage more disinvestment of public sector companies. IDBI Bank strategic disinvestment on track, pace of PSU stake sale to set direction of non-tax revenues, Sitharaman said.

In October 2022, the government, together with LIC, had invited EoI (Expression of Interest) from investors for privatising IDBI Bank by selling a total of 60.72 per cent stake. This includes a 30.48 per cent stake of Government of India and 30.24 per cent of LIC.

DIPAM, in January 2023, received multiple EoIs for IDBI Bank. The prospective buyers of IDBI Bank have already been granted security clearance by the Ministry of Home Affairs and cleared fit and proper after evaluation by the Reserve Bank of India.

Sitharaman also expressed confidence that the recent higher private consumption, which was driven by GST rate cut and hike in Income Tax exemption limit in FY26 Budget, will sustain in coming months.

Further, sustaining a 7-8 per cent economic growth is the government’s top priority, as it will benefit all citizens and create more jobs, Finance Minister Nirmala Sitharaman has said.

In an interaction with college students from different regions of the country on Sunday, after the presentation of the Union Budget 2026-27, Sitharaman said if economic growth is good, its fruits will reach all citizens.

“And that is why growth is the primary priority. Sustain it at that level, the world’s-fastest growing economy, we need to be at that level of 7 per cent, 8 per cent growth. So everything that I do will have to be for sustaining that growth,” the minister said.

She said economic growth create jobs, bring more people into workforce and more productivity.

Sitharaman further said employers are increasingly recognising the value women bring to the workforce due to their efficiency and precision. This is reflected in the rising number of women in semi-skilled roles.

However, there remains concern about the limited representation of women in boardrooms, she said, adding that more women need to rise to leadership positions to influence decision-making and serve as role models for others.

While progress has been made, more needs to be done, she said.

The minister informed the students that since the last budget, the government has consistently ensured policies, funding and support for the Orange Economy (Animation, Visual Effects, Gaming, Comics sector).

“Today, even television media depends on such creative inputs. It is a bright sector with many avenues. Creativity is challenged every day, and if you have the aptitude, this is definitely an area worth pursuing,” she said.

The minister also informed the students about the steps involved in budget preparations.

She said the budget preparation begins in late October or “November with consultations involving industry groups, businesses, economists, trade unions, and interest groups, alongside public inputs via social media.

The suggestions are shortlisted, discussed with concerned ministries and states, and refined for feasibility and implementation. After multiple reviews and drafting rounds, the budget speech is finalised, Sitharaman said.