STT hike jolts traders; Boost for electronics components manufacturing

Hello,

The Union Budget 2026 was about building supply-side strength, resilience, and long-term capabilities amid an increasingly unstable global economic order.

Delivering a record ninth Budget in a row, Finance Minister Nirmala Sitharaman announced an increase in public capital expenditure to Rs 12.2 lakh crore for 2026–27, proposed scaling up manufacturing across seven strategic and frontier sectors, including biopharma, semiconductors, rare earth magnets, and electronic components.

The gist this time was not about short-term relief but about preparing the economy to be indispensable. This is what the Economic Survey, quoting the Katha Upanishad, meant when it spoke of the gains from embracing delayed gratification.

ICYMI: The key takeaways from the Union Budget presented on Sunday. For detailed coverage, click here. 

Here’s how industry leaders reacted to the budget. 

Lastly, in a much-needed step, the government will soon establish a second campus of NIMHANS in North India and upgrade the National Mental Health Institutes in Ranchi and Tezpur as regional apex institutions for mental healthcare, research, and training.

A very positive step!

In today’s newsletter, we will talk about 

• STT hike jolts traders
• Boost for electronics components manufacturing
• Biopharma Shakti to strengthen sector

Here’s your trivia for today: Who presented the shortest Union Budget speech?

Union Budget

STT hike jolts traders

Finance Minister Nirmala Sitharaman announced significant increases to securities transaction tax (STT) rates in the Union Budget 2026—a move that comes as the brokerage industry grapples with a sharp decline in retail participation.

Sentiment dampener:

• The government will raise STT on futures to 0.05% from 0.02%, while STT on options premiums will increase to 0.15% from 0.1%. The levy on exercise of options will rise to 0.15% from 0.125%.
• Industry leader Groww saw its shares plunge moments after the announcement. The stockbroking platform's shares were down over 11% by the time the Budget speech concluded.
• The move comes against the backdrop of slowing retail participation in markets after a period of intense activity. Data from the NSE show that active client accounts across brokerages declined sharply in 2025, as tighter regulations and weaker market conditions weighed on trading volumes.

Union Budget

Boost for electronics components manufacturing

During the Budget presentation, the government increased the outlay for the electronics components manufacturing scheme (ECMS) to Rs 40,000, from the original Rs 22,919 crore announced in April 2025. 

The scheme has been a success as investment commitments have exceeded twice the target set out originally. “We propose to increase the outlay to Rs 40,000 crore to accelerate this momentum,” the Finance Minister said.

Bigger incentives:

• Under ECMS, the government offers turnover-linked incentives, capex incentives, and hybrid incentives on target segment products.
• The government will also launch the second phase of the India Semiconductor Mission (ISM) to produce equipment and materials, design full-stack Indian IP, and fortify supply chains.
• Under the Rs 76,000 crore ISM programme, the government has approved big-ticket projects, including Micron’s ATMP (Assembly, Testing, Marking and Packaging) facility, Tata Electronics’ Semiconductor Fab, one compound semiconductor fab, and various other packaging facilities. 

Union Budget

Biopharma Shakti to strengthen sector

Finance Minister Nirmala Sitharaman unveiled a new Rs 10,000 crore programme called “Biopharma Shakti” to strengthen India’s biopharmaceutical sector, as the disease burden shifts toward non-communicable illnesses such as diabetes, cancer, and autoimmune disorders.

Sitharaman said the government would undertake targeted interventions across six priority areas, including manufacturing, strategic and frontier sectors, healthcare, and advanced technologies, as part of its broader industrial and innovation strategy.

News & updates

• Crude: OPEC+ has agreed in principle to keep its planned pause on oil output increases for March. The meeting comes as Brent crude closed near $70 a barrel on Friday, close to the six-month high of $71.89 reached on Thursday, despite speculation a supply glut in ‌2026 ‌would push prices down.
• Satellites: Elon Musk's SpaceX has sought the FCC nod to launch one million satellites into Earth's orbit to power AI. The application claims "orbital data centres" are the most cost-effective and energy-efficient way to meet the growing demand for AI computing power.
• Tennis: Carlos Alcaraz is the youngest man ever to complete a career Grand Slam after securing the Australian Open title against Novak Djokovic, who had never lost in his 10 previous finals at Melbourne Park. The 22-year-old Spaniard scrambled to retrieve shots that usually would be winners for Djokovic, and he kept up intense pressure on his 38-year-old rival.

What you should watch out for

• RBI interest rate meeting: The Reserve Bank of India will hold a key interest rate policy meeting next week, which will be closely watched in the aftermath of the Union Budget. Largely, the central bank is expected to leave rates unchanged, according to economists.
• Big Tech earnings: Alphabet and Amazon are set to release results next week, which will act as a bellwether sign for the industry as a whole. Alphabet reports Wednesday night, while Amazon will release its numbers after the close on Thursday.

Who presented the shortest Union Budget speech?

Answer: Hirubhai M. Patel. He presented the 1977–78 interim Budget, delivering a speech that was just around 800 words long, making it the shortest Budget address in independent India’s history.

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