Budget 2026 expectations highlights: Industry, markets watch tax reforms, capex push ahead of Feb 1

Banish Dhar, Principal Advisor to the Chairman, Shapoorji Pallonji Group, said, "Expect this Budget to marry energy ambition with infrastructure delivery. Create a conditional “Energy-Infrastructure” capex window funding transmission, intra-state green corridors, smart meters and storage; unlock low-cost, long-tenor finance (green bonds) for HVDC, pumped hydro; tie DISCOM recapitalisation to time-bound AT&C loss reduction and tariff transparency; and ringfence funds for EV charging and feeder upgrades. Do this and the Budget will cut tariffs, reduce outages and monetise India’s renewable advantage. Publish clear milestones and a joint power-infrastructure balance sheet with measurable KPIs and enforceable penalties. The facts are glaringly supporting the urgency behind these asks,India’s installed capacity (~505 GW), the ~335 GW transmission requirement to integrate planned VRE and persistent DISCOM dues and liquidity stress."

Koushik Ketharam, Founder, Intelli360 Wealth, said," As a Wealth Manager, I see this Budget as an opportunity to deepen India’s growth story. Continued focus on infrastructure creates jobs and improves productivity across sectors. For the middle class, measures that encourage disciplined savings, home ownership, and retirement planning will strengthen financial security. For farmers, investments in irrigation, storage, agri-technology, and value addition can improve income stability and reduce wastage. Simplifying compliance and promoting formalisation will help small businesses grow. When policy supports long-term savings, steady incomes, and rural resilience, it builds a strong foundation for sustained economic growth."

Haaren C Sanghvi, CEO of HSAG, said," From a tax efficiency perspective, what many individuals and business owners are watching is whether the Budget meaningfully increases disposable income from primary earnings. There is strong anticipation that salaried professionals, especially those earning around ₹10 to ₹15 lakh, will get clearer pathways to retain more of their salary without aggressive structuring. The expectation is simple, lower tax outgo on earned income, not complex exemptions. On investments, there is growing hope for softer taxation on returns. Current capital gains structures are seen as dampening risk taking, and a rationalised approach could revive long term investing. Finally, GST rationalisation on big ticket purchases like cars and homes is being closely watched. Clearer and lower GST could directly unlock consumer spending across auto and real estate."

Shishir Joshi, founder and CEO, Project Mumbai, and Convenor, Mumbai Climate Week:

India’s growth story is inextricably linked to its urban centres, which contribute most of our GDP. To sustain this economic momentum, climate adaptation cannot be an afterthought; it must be central to our development. However, the needs of a coastal hub like Mumbai differ vastly from the challenges in Patna or Bengaluru, which is why solutions must be designed and delivered locally.

Budget 2026 has the opportunity to support this by shifting from prescriptive schemes to flexible, outcome-based finance. This would empower cities to improve air quality, ensure water security, and upgrade infrastructure in ways that suit their specific context.

For the private sector, this is critical because it de-risks investment and opens the door for green bonds and blended finance to flow into urban infrastructure. The fiscal instruments already exist; what is needed now is a framework that gives confidence that well-performing cities will be recognised and supported over time.​

As we gear up for Mumbai Climate Week, we are seeing clear signals that government, markets and citizens are ready to work together.

Sanjay Sharma, managing director & CEO, Orkla India:

From a business standpoint, the expectation from the Union Budget is continuity and clarity. Keeping consumption steady while containing inflation remains critical, especially for consumer and food-linked sectors. Steps such as GST rationalisation have already brought more discipline to pricing and operations, and incremental improvements will only strengthen that impact.

At the same time, policy signals that support predictable input costs and stable taxation will help companies plan better and avoid knee-jerk pricing actions. A Budget that prioritises long-term efficiency over short-term stimulus will strengthen confidence across the consumer ecosystem. Overall, a measured, balanced approach will be key to sustaining growth without adding inflationary stress.”

Budget week begins on a data-heavy note, with the Economic Survey 2026 set to be tabled in Parliament on January 29. The report, presented by Chief Economic Adviser V Anantha Nageswaran, will offer the government’s official assessment of where the economy stands, and where it may be headed, just days before the Union Budget. Read more

Nipun Sharma, CEO, TeamLease Degree Apprenticeship:

“As we look toward Budget FY27, apprenticeships should be positioned as a core driver of India’s workforce and economic growth strategy. They go beyond technical training to enable learning by doing, build workplace-ready capability, and support socio-economic mobility by allowing young people to earn while they learn. Through structured, high-quality experiential learning, apprenticeships align India’s skilling ecosystem with productivity growth and the objectives of SDG 4, strengthening long-term employability and economic resilience.

Targeted tax incentives for encouraging MSMEs to engage apprentices can accelerate the formalisation of skilling in a segment where training remains largely informal, leading to better employment outcomes and higher productivity. Additional incentives for engaging women apprentices can strengthen workforce diversity and improve female participation in the labour market.

Budget FY27 should also bring greater clarity and alignment between the NAPS and NATS frameworks to simplify participation for employers and learners. Mandating transparent disclosure of apprenticeship engagement in annual returns can further improve accountability, data quality, and long-term workforce planning. Finally, stronger industry–academia collaboration is essential to ensure curricula and training remain aligned with evolving workplace requirements, enabling a smoother transition from education to employment.”

The last rites of Maharashtra Deputy CM Ajit Pawar will be performed with full state honours, the Maharashtra General Administration Department (Protocol) informs.

During the three-day mourning period, the national flag will be flown at half-mast on all buildings across Maharashtra where it is regularly hoisted. No government entertainment programmes will be organised during this period. All state government offices across Maharashtra will remain closed on Wednesday, January 28, 2026.

Ajit Pawar’s sudden death in a Learjet crash on January 28, 2026 has left Maharashtra in shock, with officials confirming all five on board died as the aircraft approached Baramati from Mumbai.

Today, that loss also revives a quieter story: how Ajit Pawar once stepped in to help Bigg Boss Marathi 5 winner Suraj Chavan build a proper home in Baramati. Read more

Smita Singh, Partner ( Indirect Tax ) at S&A Law Offices:

As India moves steadily toward its Viksit Bharat vision, the Union Budget 2026 becomes a critical opportunity to accelerate the country’s next wave of economic transformation.

* One of the biggest issues faced by businesses is the risk of litigation and also prolonged litigation which take years to resolve. The Union Budget should focus on creating for clarity on litigative issues and dispute resolution. In line with Sabka Vishwas Scheme of 2019, a one-time settlement scheme under the Customs Act should be offered to ease the accumulating disputes. This scheme will also help monetize the blocked revenue involved in litigation. Further in order to provide tax certainty and a clearer framework wrt compliances and reducing the risk of litigation, the validity period for advance ruling may be extended to five years from the existing 3 years. Last but not the least simplification of the existing Customs Tariff Structure is the call of the hour. In line with the GST rate rationalization, the customs tariff framework should be simplified.

* In view of the turbulent geopolitical environment, the Government is expected to provide added incentives for exports which may improve overall economic performance and the offset trade uncertainties.

* Following GST rate rationalization in GST 2.0 – further simplification of GST provisions specifically related to Input Tax Credit is expected in order to ensure free flow of working capital and ease of doing business in the Indian economy. These measures are expected to substantially improve cash flows, reduce disputes in this area, and enhance ease of doing business.

* Introduction of provisional refunds wrt inverted duty structure cases should be a welcome step especially by amendment of Section 54(6) of the CGST Act. The amendment would permit riskbased provisional refund sanction which would eventually speed up access to working capital, reduce prolonged refund delays, and place the inverted duty refunds equal to zerorated supplies.

* By reducing the disputes, complexities of compliance, and improving cash flow, the upcoming Union budget has the potential to facilitate investments, facilitate exports and MSMEs.

* The scope of existing Production-Linked Incentive (PLI) scheme should be expanded further to included emerging technology sectors such as AI, robotic technology, space.

Sanjiv Bajaj, Joint Chairman & Managing Director, Bajaj Capital:

As India prepares for Budget 2026, the focus should be on strengthening household confidence by increasing disposable incomes and stimulating demand. Thoughtful tax relief, simplification, and policy predictability can support consumption while encouraging greater participation in long-term savings, investments, and protection.

At the household level, deeper retirement preparedness must remain a priority. Greater flexibility, awareness, and incentives for long-term instruments such as the NPS, along with improved insurance penetration, are essential to building financial resilience over time.

Sustained and timely credit support for MSMEs continues to be critical for job creation and economic stability. In parallel, continued government capex in infrastructure will help maintain investment momentum and strengthen credit demand across the economy.

A stable and transparent policy environment not only reinforces domestic investor confidence but also enhances India’s attractiveness for long-term foreign direct investment. Growth, however, must be accompanied by responsible lending practices and financial discipline, particularly in retail credit, to ensure inclusive and sustainable financial participation.

Abir Lal Dey, Partner at Saraf and Partners:

In transport and urban services, revisiting concession agreements in roads, railways and water to rebalance traffic, termination and force‑majeure risk is essential for reviving BOT and broader PPP models. Standardised sector specific concession agreements, credible revenue protections and robust dispute resolution will attract institutional capital.

On digital infrastructure, harmonised incentives and long‑tenor financing for data centres, fibre and towers alongside PLI expansion for telecommunications equipment can anchor India's data‑economy ambitions. Since Budget 2022 granted infrastructure status to data centres, the focus must shift to comprehensive policy measures including PLI expansion for the entire digital infrastructure value chain covering networking equipment, data centre hardware and telecommunications manufacturing.

IFSC GIFT City needs sharper safe harbour norms, extended tax concession sunset dates, and a stronger green‑finance mandate to compete globally against Singapore and Dubai.

A coherent tax and GST regime for renewable energy and BESS reducing GST for integrated systems, with group‑style tax consolidation enabling loss‑pooling would materially improve clean energy bankability.

Following Budget 2025's inclusion of large ships and hotels in the harmonised master list, extending infrastructure classification to tourism destinations, logistics parks and cold chain facilities would democratise access to long‑tenor financing and institutional investment through structured vehicles.

Complementary priorities include REITs equity reclassification and index inclusion, NaBFID capitalisation, offshore wind VGF schemes, and cross-border insolvency frameworks.

Rishi Agrawal CEO and CO-Founder of Teamlease Regtech:

Modernising India’s regulatory framework requires more than legislative interventions alone. Positive intent now demands serious budgetary allocations for building an enterprise DPI. India must fund a National Regulatory Compliance Grid to serve as a digital central nervous system. This would enable API-driven, machine-readable data exchange under a consent-based framework, linking enterprises not only with government but also intermediaries, financial institutions and rating agencies. It would eliminate duplication and overlaps in filings and recordkeeping requirements, slashing compliance costs and boosting regulatory efficiency.

The regulatory infrastructure of Enterprise DPI must be complemented by an ecosystem of Regulatory Service Providers (RSPs), modelled on the successful GSP architecture for GST. These technology-led RSPs would seamlessly deploy APIs hosted on API Setu, abstracting complexity by embedding compliance directly into transaction cycles. This setup will ensure that as laws evolve, RSPs absorb the changes, enabling seamless transitions for businesses. Just as India Stack revolutionised payments, Enterprise DPI will transform compliance for millions of MSMEs and enterprises.

Rajit Mehta, Chairman, Association of Senior Living India (ASLI):

“As India undergoes an unprecedented demographic transition, senior care requires urgent policy attention. We urge the Union Budget to recognise senior care as essential social infrastructure, enable long-term care financing, and establish a dedicated nodal agency to streamline regulations. GST reforms, insurance incentives, and investment in care capacity are critical to making senior care affordable, accessible, and dignified. It is time to build a care-led ageing framework that supports India’s seniors with compassion and inclusivity.”

The rupee’s slide over the past few months has turned the external sector into a key macro risk just as the government prepares for Budget 2026. With capital flows turning volatile, foreign investors pulling money out of Indian equities and global uncertainty weighing on emerging market currencies, economists say the Budget will be closely watched for signals on how India plans to shore up investor confidence, attract foreign capital and maintain fiscal credibility. Read more

Saptarshi Basu, marketing head- Emma The Sleep Company India:

“India’s strong GDP growth and rising disposable incomes are reshaping consumer behaviour, with people increasingly investing in health, wellness, and quality-of-life products. In the upcoming Union Budget 2026, we expect the government to continue prioritising economic growth while strengthening support for entrepreneurship, innovation, and the startup ecosystem.

The mattress industry is undergoing a significant transformation. We are witnessing a rapid shift from traditional products to premium, technology-driven sleep solutions, supported by greater health awareness and the expansion of e-commerce. The industry's value is approximately around $2.13 billion in 2023 and projected to exceed USD 3.89 billion by 2031 at a CAGR of over 8%, the sector is poised for sustained growth driven by innovation in foam, memory foam, and smart mattresses, along with increasing demand for services such as cleaning and refurbishment.

At Emma, we remain optimistic about the industry’s trajectory and look forward to policies that promote manufacturing, innovation, and ease of doing business, enabling us to reach more Indian consumers and elevate sleep standards across the country.”

Abhishek Aggrawal, Chief Executive Officer, Birla Fertility and IVF:

“India’s health system has made significant progress in prevention, diagnostics, and treatment. Fertility care now needs to be formally integrated into this framework as part of comprehensive family health planning.

Budget 2026 has an opportunity to enable earlier and more efficient fertility care through practical measures. Integrating fertility screening into preventive health programmes and extending insurance coverage to diagnostics and early stage interventions would allow people to seek care sooner, when treatment is more effective and costs are better controlled.

Access must be matched with quality. National standards for fertility laboratories, structured training for embryologists, and consistent clinical protocols are essential to delivering safe and reliable outcomes across the country.

These are targeted investments with long term returns. Strong fertility care infrastructure supports family formation, demographic stability, and a more resilient healthcare system, making it a logical inclusion in India’s health and economic planning.”

Beyond sector-specific expectations, businesses are looking for clarity on the government’s medium-term fiscal path, continuity in capital expenditure, GST reforms, and measures to support consumption, MSMEs and private investment. Policy stability and predictable taxation are seen as key to sustaining confidence.

Restaurants and food delivery players are flagging sustained cost pressures, citing rising rentals, higher compliance costs and recent tax changes that have narrowed margins.

Industry stakeholders say Budget decisions on indirect taxation, lease-related levies and regulatory compliance will be crucial in determining whether restaurants can continue absorbing delivery commissions and supporting discount-driven online demand.

The insurance industry is hopeful of tax reforms to boost coverage and long-term savings. Its key asks include a hike in tax deduction limits, extension of tax benefits to the new tax regime for both health and life insurance policies, and resolution of the input tax credit (ITC) anomaly under GST. Insurers argue that these steps would encourage households to opt for adequate protection, ensure tax parity for annuity and pension products, and help contain premium costs.

At present, deductions of up to Rs 25,000 for individuals below 60 years and Rs 50,000 for senior citizens are available under Section 80D under the old tax regime.

The travel and tourism sector is seeking structural reforms rather than short-term incentives. Key demands include infrastructure status for tourism, GST rationalisation, improved access to finance for MSMEs, enhanced air and rail connectivity, and sustained government support to position tourism as a core economic growth engine.

With domestic travel demand remaining strong and international tourist inflows gradually recovering, industry leaders say Budget 2026 presents a critical opportunity to address long-standing regulatory and fiscal gaps.