New Delhi, January 31, 2026: With just one day to go before Finance Minister Nirmala Sitharaman presents her ninth straight Union Budget on February 1, anticipation is building across India’s political, business, and citizenry circles. The Union Budget 2026–27 is seen as a pivotal moment for fiscal and economic policy, coming at a time of global uncertainty, rising geopolitical tensions, and evolving domestic challenges. Expectations are high that this year’s budget will go beyond routine fiscal allocations, potentially signaling structural reforms, tax rationalisation, and bold policy shifts to bolster growth, jobs, investment, and consumption.
📊 Economic Survey Sets the Stage for the Budget
A day ahead of the budget, the government tabled the Economic Survey 2025–26 in Parliament—an annual document that usually shapes the priorities and tone of the main budget speech. The survey projects India’s GDP growth for FY27 in the range of 6.8%–7.2%, reflecting resilient economic momentum despite global headwinds. It also underscores the need for policy continuity, deeper reforms, and strategic investments to sustain growth and deepen structural transformation.
Prime Minister Narendra Modi has emphasised that the Economic Survey should serve as a “guide” for informed policymaking, signaling that many of its analytical recommendations could be reflected in Budget 2026–27.
Tax Expectations: Relief Without Compromise
One of the most talked-about expectations ahead of the Union Budget is tax relief for individuals and simplification of the personal tax regime.
Many taxpayers hope for rationalisation of the top 39% tax bracket under the new tax regime, which could reduce effective marginal rates. Calls for an increase in the standard deduction—potentially from ₹75,000 to ₹1 lakh—aim to provide broader relief and higher disposable income for salaried households without complicating compliance. Further expansions of deductions under Section 80TTA for savings accounts and enhanced house loan interest deductions are also widely anticipated.
Alongside income tax changes, voices from across the country are urging clarification and tax relief measures for emerging asset classes and investments. For example, there are strong expectations that Budget 2026 will provide clarity on cryptocurrency taxation and simplify compliance, which could clear longstanding ambiguities around virtual digital assets.
Beyond personal taxation, industry lobbyists and financial experts are pressing for capital markets incentives such as recalibrating long-term capital gains (LTCG) taxes or reviewing securities transaction tax (STT) to boost investor participation and capital formation. Broader changes such as simplifying income tax procedures and reducing compliance burdens are also on many stakeholders’ wish lists.
Capital Expenditure & Infrastructure Push
Budget 2026 is expected to reinforce India’s strong commitment to capital expenditure (capex), which has been a hallmark of recent fiscal strategies aimed at creating jobs and long-term productive assets.
Analysts and industry insiders predict the government may increase overall capex by 10–15%, focusing on critical sectors such as logistics, urban infrastructure, renewable energy, digital connectivity, and green technologies. This continued push is widely seen as vital for bridging infrastructure gaps and enhancing India’s global competitiveness.
In particular, the highways and transport sectors are expected to secure robust allocations and strategic policy support. Roadways, expressways, and transport corridors are central to the seamless mobility agenda and are expected to be a key focus in the Budget.
Housing and urban development are similarly expected to get special attention, with the Pradhan Mantri Awas Yojana (PMAY) programme likely to receive increased allocations to address housing affordability for both rural and urban populations. Such emphasis aligns with broader economic and social priorities, including employment generation and enhanced quality of life.
Financial Sector: Clarity & Support
Stakeholders in the Banking, Financial Services, and Insurance (BFSI) sector are calling for the upcoming Budget to address regulatory clarity and ease liquidity constraints. Clarifying tax policies for financial instruments, enhancing digital frameworks, and expanding capital access for banks and non-banking financial companies (NBFCs) are seen as critical for sustaining credit flow and investment momentum.
There is also a growing appetite for targeted measures that support fintech innovation and broaden financial inclusion, particularly in semi-urban and rural areas, which could make formal financial services more accessible across diverse populations.
🧑💼 Industry & MSME Wish Lists
Small and medium enterprises (MSMEs) across sectors have presented detailed expectations ahead of the budget. In states like Madhya Pradesh, industry bodies are seeking GST relief, simplified compliance, and streamlined access to government schemes to reduce operational overheads and boost competitiveness. Requests also include sector-specific incentives for textiles, lower input costs, and tariff rationalisation to make domestic manufacturing more profitable.
The food processing sector, particularly in agri-rich states, expects targeted support for climate-resilient infrastructure, modern technology adoption, cold chain development, and export-oriented facilities. Enhanced market linkages, R&D investment, and digital platforms to improve traceability and product quality are top priorities for stakeholders.
Policy Reforms & Structural Priorities
Experts widely expect Budget 2026 to do more than allocate funds—it is seen as a chance to signal structural policy reforms that improve productivity and future growth prospects.
Key policy areas poised for focus include
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Implementation clarity on the new Income-tax Act, 2025, replacing the six-decade-old Income-tax Act, 1961, effective April 1, 2026. Budget language may help clarify transition rules and compliance expectations.
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Trade policy enhancements, including lowered duty structures and export incentives, aimed at boosting competitiveness in global markets.
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Expansion of Production Linked Incentive (PLI) schemes to more sectors and deeper integration with long-term industrial strategy.
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Digital public infrastructure investments to support fintech, MSME digitisation, and government services delivery.
These combined policy thrusts reflect an evolving consensus that budgetary allocations must be paired with reforms that enable easier business operations and stronger investment flows.
Public Expectations & Consumption Support
Beyond corporate and institutional demands, public sentiment ahead of Budget 2026 has been dominated by calls for relief that directly impacts household finances. With inflation affecting everyday consumption and living costs, many citizens are looking for enhanced tax rebates, broader income slab thresholds, and simplified tax structures that can boost disposable incomes.
Welfare schemes such as MGNREGA, PM-KISAN, and expanded social safety nets are also expected to feature in discussions, even as the government balances fiscal prudence with demand support.
What Happens Next
Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget 2026–27 on Sunday, February 1, 2026, in the Lok Sabha. Markets, corporates, analysts, and households will closely watch her speech for policy signals that could shape India’s economic trajectory for the next year and beyond.
The budget’s final contours will reveal whether the government has responded to broad expectations for tax simplification, growth-oriented capex, structural reforms, and citizen-centric policy measures.
