Budget 2026 Expectations Live: Markets brace for high-stakes Budget amid rupee pressure, FPI exits

Hari Somalraju, SYSTRA Group India

“As we approach the Union Budget 2026, we have a strong expectation that mobility and freight transport will remain at the centre of the country’s growth agenda. Continued investments in rail modernisation, high-capacity corridors, and multimodal integration are critical to improving connectivity, reducing logistics costs, and enabling sustainable urbanisation_.

Rail-led mobility has the potential to transform how people and goods move across the country, driving productivity while significantly lowering the carbon footprint of transport. From a broader perspective, a focused push on technology adoption and public-private partnerships can accelerate large-scale implementation and delivery. Strengthening multimodal transport planning across urban and intercity networks can unlock inclusive growth, support regional development, and enhance quality of life across cities. A forward-looking Budget that prioritises future-ready mobility infrastructure will be key to positioning India as a globally competitive and sustainable economy.”

Dr Vivek Garg, Founding Director, NVT Quality Lifestyle

The Union Budget 2026 has a clear opportunity to decisively reshape India’s residential real estate narrative by aligning fiscal policy with how Indians live, earn, and invest today. While affordability will rightly remain central, the real inflection lies in enabling aspiration—through rationalised taxation, easier access to housing finance, and sustained investment in urban infrastructure. Housing affordability must be viewed not as a pricing problem, but as a cost-of-ownership challenge; improving post-tax cash flows through higher home-loan interest deductions can unlock genuine demand without distorting market dynamics or compromising supply quality.”

“In the premium and luxury housing segment, demand is increasingly driven by end-users and long-term investors seeking integrated living, wellness, security, and long-term value creation rather than short-term speculation. Luxury housing today is about lifestyle depth and legacy, not indulgence. While direct incentives may continue to focus on affordable housing, measures that improve liquidity, clarify taxation, and strengthen urban infrastructure will have a powerful multiplier effect—accelerating high-value residential development across India’s key metros and emerging cities, while reinforcing housing’s role as economic infrastructure with far-reaching benefits for employment, consumption, and financial stability.”

Kaushik Banerjee, Co-founder and CEO, flutrr

As India’s digital economy matures, this Union Budget presents an opportunity to strengthen homegrown consumer internet platforms that are competing directly with global incumbents. While global apps have capital, scale, and legacy advantages, Indian platforms are building with a far deeper understanding of local culture, behaviour, and linguistic diversity—and this deserves policy recognition.

For startups in categories like dating and social discovery, the focus should move beyond growth-at-any-cost to sustainable, responsible digital ecosystems. Clearer frameworks around data protection, AI-led personalisation, and algorithmic transparency will help Indian platforms innovate confidently while building user trust.

There is also a strong case for targeted incentives for Indian digital platforms creating local IP, supporting creators, artists, and community-led engagement models. Unlike global apps, Indian platforms invest heavily in cultural relevance—music, language, and regional nuance—which directly contributes to employment and the creator economy.

“We at Zelio E-Mobility believe India’s electric mobility transition will be driven primarily by two-wheelers, where affordability, daily usability, and scale are the most critical factors. Ground-level adoption trends show that sustainable EV growth depends more on long-term structural enablers than short-term subsidies, making policy stability increasingly important for manufacturers. The Union Budget 2026–27 should prioritise deeper localisation through component-specific PLI support for battery cells, controllers, and power electronics to reduce import dependence and strengthen Make in India. Rationalising GST on electric two-wheelers and enabling priority-style, low-cost financing can accelerate mass adoption more effectively than one-time incentives. A clear national charging roadmap, including a target of 50,000 public charging points by 2027 and mandatory chargers at highways and fuel stations, along with longer-tenure capital, will be essential to building a scalable and resilient EV ecosystem," said Mr. Kunal Arya, Co-founder & MD of Zelio E Mobility

Shahid Balwa, Vice Chairman and Managing Director, Valor Estate

India’s housing market defies the global slowdown—we have the demand, but structural friction holds us back. Unlike China’s oversupply crisis, we face a liquidity lock. To bridge this, the Budget needs a 'Consumer-First' reset. First, the ₹2 lakh tax deduction is an artifact of 2014; indexing it to Repo Rates acts as an automatic shock-absorber for middle-class EMIs, protecting disposable income. Second, the current GST regime inadvertently taxes the poor by denying Input Tax Credit. Restoring ITC—conditional on strict, RERA-audited pass-throughs—can slash housing costs by 15-20% for the EWS segment. Finally, institutionalizing a refinancing window for the ₹4.6 lakh crore stuck in stalled projects will convert 'dead capital' into economic velocity. This isn't a subsidy; it's a strategic unblocking of India's urban future.

“Public capital expenditure continues to play a crucial role in shaping industrial confidence, particularly for manufacturing-focused MSMEs. Clear signals on infrastructure spending, financing mechanisms, and industrial policy allow businesses to invest with a longer horizon. For manufacturing to deepen, enterprises need predictability rather than short-term incentives. Strengthening MSMEs across the value chain will ultimately determine how effectively India converts policy intent into durable capacity, employment generation, and consistent industrial output," Yash Gupta, Managing Director, Rikayaa Greentech Private Limited

Nikhil Barshikar, Founder & CEO of Imarticus Learning and Chairman of the Advisory Council at Imarticus School of Finance & Business

"NEP 2020 is a well-designed and forward-looking policy that provides India with a clear, coherent framework across schools and higher education. It gets the fundamentals right, from foundational learning and teacher development to multidisciplinary universities, credit mobility, and global integration. The real opportunity in the next Union Budget is to translate this strong policy intent into execution at scale.

In schools, the challenge is capacity and delivery. India still faces an estimated 1 million-plus teacher vacancies, even as the system serves over 250 million students. Bridging this gap will require sustained funding for teacher recruitment, continuous professional training, and digital teaching infrastructure, particularly in early grades where learning outcomes have the highest long-term impact.

“India’s gems and jewellery sector is navigating the dual pressure of elevated gold and silver prices and slowing volume growth, making the Union Budget a timely opportunity to restore momentum through pragmatic reforms. My recommendations in an unbiased productive manner are- First, a reduction in gold import duty to 3 percent which would immediately ease cost pressures on an essential product consumed across income segments, while reviving livelihoods across the value chain from goldsmiths to manufacturers. And second, offering a greater transparency through the publication of gold bar numbers on accessible customs department portals, enabling verification of duty-paid imports and strengthening formal compliance. Another important area in these turbulent lower sales turnovers for the jewellery industry is permitting more beneficial inventory management as current high gold & silver rates have in many cases inflated inventory values thereby mandating income tax on notional values. Unprecedented world events are impacting many small & medium jewellery businesses (manufacturing & distribution) making higher capital requirements, interest costs, lower income thus adversely impacting manufacturing activity." Dr. C Vinod Hayagriv, Managing Director & Director, C. Krishniah Chetty Group Of Jewellers

As India’s IT services industry and GCC ecosystem continue to scale, the upcoming Union Budget presents an opportunity to reinforce the fundamentals that enable consistent, high-quality delivery. Continued investment in secure, reliable digital and physical infrastructure will further strengthen India’s position as a preferred destination for global capability centers and long-term client programs. In parallel, clear policy direction on AI adoption and workforce readiness will be critical to building a world-class, innovation-driven engineering talent base that can deliver sustained value with confidence and predictability. -- said Mr. Girish Hirde, Global Delivery Head at InfoVision.

Oben Electric views the Union Budget 2026-27 as a vital opportunity to strengthen India’s electric mobility journey. While 2025 was a landmark year with EV sales reaching a record 2.3 million units, anchored by 1.28 million two-wheelers, the industry’s long-term health depends on structural tax reforms. A primary concern for domestic manufacturers is the inverted tax structure. While finished EVs attract a 5% GST, the raw materials sourced to build these vehicles are taxed at 18%. This 13% disparity traps vital working capital across the industry, driving up production costs and straining liquidity. Aligning the GST on all EV components to a uniform 5% is essential to support domestic manufacturing and make 'Make-in-India' EVs more affordable for the mass market. Furthermore, we believe the next wave of adoption will be led by electric motorcycles. While scooters have seen early success, motorcycles dominate with nearly 70% of India’s two-wheeler landscape but remain significantly under-electrified. To achieve our national 2030 targets, the budget should introduce targeted subsidies and demand incentives specifically for electric motorcycles. Prioritizing this dominant segment will unlock the next level of mass-market electrification and move India closer to a truly self-reliant EV ecosystem.-- said Ms. Madhumita Agrawal, Founder & CEO of Oben Electric

Manish Mohnot, Managing Director & CEO Kalpataru Projects International Limited

The EPC sector continues to be a key enabler of nation building, with sustained government investments driving tangible improvements in infrastructure outcomes across the country. We expect continued focus on large-scale infrastructure, with higher allocations for urban development in Tier 2 and Tier 3 cities, which are emerging as key growth drivers.

Beyond core public works, focused investments in integrated industrial ecosystems will be critical to attract global enterprises and support large-scale manufacturing and infrastructure development. Export-focused support such as stronger credit and risk guarantees will encourage Indian EPC companies in scaling overseas projects and competing globally. On the energy front, higher allocations for power transmission and distribution are essential to strengthen the national grid, ease congestion, and enable greater integration of renewable energy in line with India’s carbon neutrality goals. Continued grid modernisation and policy support for international expansion of Indian EPC companies will enhance global competitiveness and support long-term, sustainable growth.

“We at Oakter expect the Union Budget 2026–27 to strengthen India’s ambition to become a global hub for original design manufacturing and electronics innovation, not just assembly-led production. For companies building products from concept to scale in India, the priority must be design-linked incentives, deeper component localisation, and easier access to working capital.

Expanding and refining PLI support for ODM-led manufacturing, alongside targeted incentives for batteries, power electronics, IoT hardware, and semiconductor-linked supply chains, will significantly improve global competitiveness.

The Budget should also focus on lowering the cost of manufacturing through stable GST structures, faster input tax credits, and infrastructure support for automated factories. This will enable Indian manufacturers to move up the value chain, create IP-driven products for global markets, and position India as a trusted source of world-class, innovation-led electronics manufacturing”-- said Mr. Shishir Gupta, Co-founder & CEO of Oakter.

The Bharatiya Janata Party (BJP) has prepared a comprehensive nationwide strategy to publicise the Union Budget 2026 and communicate its key features to the public. As part of the campaign, all Union Ministers, Chief Ministers of BJP-ruled states, and senior party leaders will address the media through press conferences across the country. The party plans to organise press conferences at nearly 150 locations nationwide. The Budget Outreach Campaign 2026 will be conducted from 1 February to 15 February, during which a series of programmes and interactions will be held to highlight the vision, priorities, and benefits of the Budget. (ANI)

Announcements which could take the market by surprise include any large tax giveaways, including cuts in debt taxation, capital gains taxes, and STT (Read More)

As investors prioritise stability over unexpected policy changes, tax parity has emerged as a key expectation from Budget 2026. Market participants believe the upcoming Budget could play a crucial role in shaping investor sentiment and capital flows.

Aditya Agrawal, CFA and Chief Investment Officer at Avisa Wealth Creators, said the 2026 Budget is likely to be pivotal for financial markets, with an emphasis on stability and uniform taxation. He noted that key expectations include a reduction in long-term capital gains (LTCG) tax to 10% and a rollback of the securities transaction tax (STT) to encourage greater participation from foreign institutional investors.

Agrawal also highlighted the need for tax parity across debt instruments and structured products, many of which are currently taxed at marginal slab rates that can exceed 40% after accounting for surcharge and cess.

The Indian Bullion Jewellers Association pegged the gold price at Rs 1,67,800 per 10 grams of 24-carat purity at its 12:30 pm rate session on January 30. The metal's price is 4.34 percent down from its previous close at Rs 1,75,416, due to a firmer US dollar. On MCX, the price dipped 3.83 percent to Rs 1,76,910 at 1.10 pm. On January 29, 2026, domestic gold prices hit a record Rs 1,93,096 after the US Federal Reserve held interest rates steady. (Read More)

Developers have called for single-window clearances, consolidating approvals from multiple authorities on a unified digital platform (Read More)

The domestic cigarette industry is preparing for a 6-8% decline in volumes in the next fiscal following the introduction of additional excise duties and higher GST effective February 1, according to Crisil Ratings.

At present, cigarettes attract a 28% goods and services tax (GST) along with a compensation cess that varies by product. From February 1, the compensation cess will be withdrawn and replaced with an additional excise duty ranging from Rs 2.05 to Rs 8.5 per cigarette stick, depending on its length.

Crisil said mid to premium cigarettes, measuring more than 65 mm, will attract excise duties of Rs 3.6 to Rs 8.5 per stick. Cigarettes in the mass segment, with lengths below 65 mm, will face lower excise duties in the range of Rs 2.05 to Rs 2.1 per stick. In addition, the GST on the final retail price will rise to 40%.

While the duty increase is relatively lower for the mass segment-which accounts for around 40-45% of total cigarette volumes-manufacturers are expected to absorb part of the impact due to the high price sensitivity of consumers in this category.

New research shows Trump's tariffs backfired—US consumers bore 96% of the cost while Indian exporters maintained prices and diversified markets. (Read More)

As the Union Budget 2026 approaches, tax experts are increasingly calling for a reset of India’s long-term savings incentives, arguing that existing provisions have failed to keep pace with inflation, rising living costs and evolving employment patterns. A key area where taxpayers are demanding change is Section 80C of the Income-tax Act, which is available under the old tax regime, where the Rs 1.5 lakh deduction limit has remained unchanged for over a decade. Experts say this ceiling no longer reflects the financial realities of middle-class households that are simultaneously managing housing costs, education expenses and retirement planning. There is a strong expectation that Budget 2026 could raise this limit and extend enhanced deductions to the new tax regime as well, ensuring that long-term savings do not lose relevance as the simplified regime becomes the default. (Read More)

House rent allowance (HRA) is a component of salary paid to employees who live in rented accommodation. Tax exemption on HRA is available only under the old tax regime. The exempt amount is calculated as the lowest of three values: the actual HRA received, rent paid minus 10% of salary, or 50% of salary for employees in metro cities (40% for non-metros).

With the growing adoption of the new tax regime, several deductions under the Income-tax Act, 1961 have lost relevance. Data shows that nearly 72% of taxpayers filed returns under the new regime in AY 2024-25. While deductions are largely unavailable under this regime, revised slabs and rates have lowered tax burdens for many. Experts believe Budget 2026 should reassess limits such as the home loan interest deduction and Section 80C to better reflect present-day housing and investment costs.

Experts argue that meaningful tax simplification goes beyond digitisation and paperwork reduction. According to Divya Baweja, Partner at Deloitte India, the core issue lies in how the existing tax framework fails to capture the complexity of modern income sources. She notes that simplification should focus on creating a smoother, more intuitive tax experience that aligns with how taxpayers earn and manage income today.

The National Savings Certificate (NSC) is a government-backed fixed-income investment with a five-year lock-in period. It currently offers an interest rate of 7.7%. Investments in NSC qualify for a deduction of up to Rs 1.5 lakh under Section 80C, but only for taxpayers opting for the old tax regime.

Manas Chugh, Director at Osgan Consultants Pvt Ltd, says Budget 2026 should lock in four key personal finance reforms. These include increasing the standard deduction under the new tax regime from Rs 75,000 to Rs 1,00,000, smoothing the income-tax slab between Rs 12 lakh and Rs 20 lakh to reduce sudden jumps in tax rates, allowing home loan interest deduction under Section 24(b) even in the new regime, and raising the Section 80D limit to Rs 50,000 from Rs 25,000 to account for rising medical costs.

As calls for tax relief for the middle class grow louder ahead of Budget 2026, experts have highlighted a few targeted measures that could offer immediate financial relief to households. These include a higher standard deduction, smoother tax slabs and enhanced healthcare-related deductions.

Capital gains refer to the profit earned from the sale of assets such as shares, mutual funds, real estate or gold. The tax treatment of capital gains remains the same under both the old and new tax regimes. Long-term capital gains (LTCG) on equity are taxed at 12.5% on gains exceeding Rs 1.25 lakh, while short-term capital gains (STCG) are taxed at 20%. Gains from other assets are taxed according to the applicable income-tax slab.

New research shows Trump's tariffs backfired—US consumers bore 96% of the cost while Indian exporters maintained prices and diversified markets (Read More)

ICAI President Charanjot Singh Nanda said the institute has consistently been at the forefront of nation-building and continues to work closely with the government as a trusted knowledge partner. He added that the Pre-Budget Suggestions for 2026-27 seek to support a tax ecosystem that enhances ease of doing business, drives sustainable growth and strengthens India's transition towards a resilient and green economy.

Submitted in November 2025, the memorandum covers a wide range of issues across direct taxes and international taxation. The suggestions include both broad policy-level reforms and specific, section-wise amendments to the Income-tax Act.

As part of its proposals, ICAI has sought a higher surcharge threshold and enhanced deductions under the new tax regime. These include deductions for medical insurance premiums as well as for the maintenance of dependent persons with disabilities.

With the Union Budget 2026-27 just two days away, the Institute of Chartered Accountants of India (ICAI) has presented a comprehensive set of tax reform proposals in its Pre-Budget Memorandum. The recommendations focus on easing compliance, reducing litigation and promoting sustainable economic growth.

The Economic Survey prepared by the CEA has pegged India’s growth between 6.8 and 7.2 percent for FY27 higher than IMF estimate of 6.4 percent and World Bank’s projection of 6.5 percent (Read More)

States’ bond supply is making investors dump even central government bonds. (Read More)

With out-of-pocket medical expenses continuing to rise, early diagnosis and routine screening are becoming increasingly important to reduce financial stress on households. Aditya Kandoi, CEO and Founder of Redcliffe Labs, stresses the need to realign healthcare spending toward prevention rather than late-stage treatment. He notes that nearly 60% of healthcare costs in India are paid out of pocket, largely because more than 70% of diseases are diagnosed at advanced stages.

Kandoi says the Union Budget 2026 should take bold steps to strengthen India's preventive healthcare ecosystem by expanding tax benefits for routine diagnostics and investing in early detection programs. Such measures, he adds, would help reduce long-term pressure on tertiary healthcare infrastructure and lower catastrophic health expenditure for households.

SBI Research, in its Budget 2026 expectations report, has recommended the removal of TDS on interest earned from savings bank deposits, or at the very least, a substantial increase in the existing thresholds. The suggestion is part of a broader push to encourage financial savings, which have been steadily moving away from traditional bank deposits. The report highlights that the share of bank deposits in household financial savings fell from 38.7% in FY24 to 35.2% in FY25.

Under the new tax regime, salaried individuals and pensioners are eligible for a flat standard deduction of Rs 75,000. This directly reduces taxable income and does not require any proof of expenses.

Tax deducted at source (TDS) is a tax collection mechanism under which tax is deducted by the payer before making a payment. It applies to income such as salaries, interest, rent, and professional fees.

Gold and silver exchange traded funds (ETFs) declined in trade on January 30, as the prices of the precious metals plunged after a record rally.

Gold futures with April expiry on MCX dropped around 5 percent to trade at Rs 1,75,100 per 10 grams. This comes a day after the contracts hit a fresh lifetime high of Rs 1,93,096 per 10 grams. The contracts with February and June expiries fell around 6 percent each in the early trading hours of Friday. (Read More)

From relaxation of delisting norms and Press Note 3 to tax sops and tackling the aftermath of the Tiger Global verdict, top dealmakers speak to Moneycontrol on their key expectations from Budget 2026 (Read More)

Experts are urging the government to extend Section 80D benefits to the new tax regime and consider tax credits, citing global examples where such measures have successfully expanded health insurance coverage.

Improved deposit inflows would help financial institutions mobilise capital more efficiently and support stronger lending while maintaining liquidity.

These incentives could include reducing holding periods for tax benefits and increasing limits under Section 80TTA and Section 80TTB.

Motilal Oswal's Union Budget FY27 expectations report suggests enhanced tax incentives for deposits to encourage stable household savings.

Analysts expect the government to announce steps to make bank deposits more attractive and strengthen the formal savings ecosystem.

Household financial savings have been gradually moving away from traditional bank deposits, raising concerns about the stability of deposit-based funding.

Targeted measures for homebuyers and senior citizens are also anticipated, aimed at easing financial pressures on these groups.

There is strong demand for higher deductions under Section 80D to help taxpayers manage rising health insurance premiums and medical expenses.

Expectations from the Budget include a hike in the standard deduction to Rs 1 lakh, an increase in the LTCG exemption limit to Rs 2 lakh, and broader tax relief across income categories.

Finance Minister Nirmala Sitharaman will present Budget 2026 on Sunday, February 1, 2026, at 11 AM, with markets and taxpayers closely watching for key policy announcements.