Union Budget of India 2026: Expectations
India’s Union Budget 2026, scheduled for presentation around late January or early February 2026, builds on the fiscal consolidation and growth momentum from the 2025-26 budget. Expectations center on balancing robust GDP growth above 8%, controlled inflation, and global uncertainties with targeted reforms. Stakeholders anticipate measures to boost consumption, manufacturing, and sustainability while aiming for a fiscal deficit near 4.4% of GDP.
Fiscal Priorities
Fiscal discipline remains key, with projections for revenue deficit at 1.5% of GDP and continued capex growth around 10%. Experts expect rationalized expenditure through infrastructure investments, including Rs 1.5 lakh crore in interest-free loans for states.
Debt-to-GDP targets under the Fiscal Responsibility Act guide debates toward 40% by FY31.
Tax and Income Relief
Middle-class taxpayers seek higher exemption limits, simplified slabs, and relief like aligning SARFAESI thresholds or reducing TDS on NBFC interest. Liquidity support for MSMEs via credit guarantees and tax cuts totaling INR 1.03 lakh crores is widely anticipated.
Sectoral Boosts
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MSMEs and Employment: Enhanced credit, skilling schemes for 5 lakh entrepreneurs (focus on women, SC/ST), and supply chain integration.
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Infrastructure: Higher allocations for roads, logistics, and Tier 2/3 cities to aid inclusive growth.
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Green Energy: Incentives for renewables, green hydrogen, and climate resilience funds.
Growth Drivers
Emphasis on Make in India, Viksit Bharat@2047, and manufacturing via industrial corridors and exports. Deloitte highlights competitiveness and productivity markers.
