Finance Minister announces higher securities transaction tax:Revenue Secretary says, STT hike aims to shield small investors from losses

Finance Minister Nirmala Sitharaman presented the Union Budget 2026 in Parliament today, February 1. The budget included announcements ranging from removing duties on cancer drugs to raising the securities transaction tax (STT) in the stock market. After the budget speech, Nirmala Sitharaman held a press conference and answered many questions related to the budget. Here are 10 key questions and their answers. Question 1: What do you have to say about Rahul Gandhi’s criticism of the budget and his demand for change?
Answer: The Finance Minister said she does not understand what changes are being referred to, as the country’s economic foundation is very strong. She explained that the budget includes special schemes for small and medium-sized enterprises (SMEs), as well as the leather, textile, and shoe industries. Measures have also been taken to protect farmers and women entrepreneurs from global instability, so external shocks do not affect them. Question 2: How much did global uncertainty affect the budget?
Answer: The Finance Minister acknowledged that global developments are always considered when preparing the budget. However, she said global uncertainty cannot be attributed to any single measure. The Chief Economic Advisor (CEA) also noted in the Economic Survey that despite strong fundamentals, the world remains uncertain, and the budget tries to balance this. Question 3: Will the rise of AI reduce jobs for young people in India?
Answer: The Finance Minister said AI can never replace human labour and must be used carefully. The aim of AI in India should be to create new, attractive jobs for young people. Indian startups are already using AI. The government wants not just large language models (LLMs) but also small- and medium-scale models to meet India’s economic needs. Infrastructure and capabilities are being built so that AI benefits reach the people directly. Question 4: What are “Rare Earth Corridors,” and why are they important?
Answer: This is a major budget initiative. Rare earths are minerals used in making mobile phones, chips, and batteries. Corridors will be developed in Odisha, Kerala, Andhra Pradesh, and Tamil Nadu. India has these minerals but lacks processing capacity. These corridors will allow India to process minerals domestically, reducing dependence on countries like China. Similar to the Defence Corridor, this is expected to bring a major economic transformation. Also Read | Sitharaman may change 75-years-old budget tradition Question 5: What announcements have been made for the Electronics and Semiconductor Mission?
Answer: Two key steps have been announced to promote ‘Make in India’: Semiconductor Mission: Aims to improve India’s “India Stack” and intellectual property rights. ₹40,000 crore program to manufacture electronic components. The goal is to make India self-reliant in electronics. Question 6: What is the government doing for higher education?
Answer: The government is setting up five university hubs across India. These will allow students to get a world-class education without going abroad, avoiding large loans or visa concerns. Partnerships with private and foreign universities will also be part of this initiative. Question 7: Why was the Securities Transaction Tax (STT) increased?
Answer: The Revenue Secretary said the increase was needed on futures and options (FO) trading. When options trading grows beyond the country’s GDP and stock market size, it becomes pure speculation, causing big losses to small investors who do not fully understand it. Question 8: What has been the status of infrastructure spending over the past 10 years?
Answer: The Finance Minister said this budget allocates 4.4% of GDP for public capital expenditure, the highest in 10 years. This is crucial to maintain India’s post-COVID economic momentum. The funds will be used to build waterways, high-speed rail, and freight corridors. Question 9: Has the government made any special announcements for election-bound states?
Answer: The Finance Minister said the budget covers all states, not just those with upcoming elections. The focus is on balancing the overall Indian economy rather than targeting specific states. Question 10: What is the core vision of the budget?
Answer: According to the Finance Minister, the budget aims to make India a developed nation by 2047. Its main pillars are increasing productivity, creating jobs, making technology benefits accessible to all, and sustaining economic growth. Also Read | Markets plunge in worst budget day performance in 6 years