The Budget 2026 countdown has begun, as Finance Minister Nirmala Sitharaman will present her 9th Union Budget on Sunday, February 1. According to experts, consumption push is likely to be the centre of this year’s budget, as the Union Government has announced tax incentives and rationalised GST rates.
Key expectation
As the Finance Minister is set to present the 88th Union Budget since independence, here is a look at the key areas where the budget is likely to focus at-
- 1. Fiscal and policy support
- 2. Defence sector boost
- 3 MSME growth
- 4. Railway and infra sector development
- 5. Green transition and energy reforms, among others
ICRA Ratings indicate that Budget 2026 is likely to increase railway allocation to drive capacity expansion, modernisation, decongestion, and enhance connectivity. The rating agency says that, with electrification nearly complete, focus will remain on decongestion through capacity augmentation—new routes, gauge conversion, track doubling, and dedicated freight corridors.
The PHD Chamber of Commerce and Industry has made key suggestions for the Union Budget 2026-27 to facilitate easier access to financing for MSMEs, reduce regulatory burdens, thereby lowering associated costs, and enhance their global competitiveness.
Budget 2025: Key Highlights
Last year, in Budget 2025, the Union Government introduced a new income tax bill aimed at simplifying the law and reducing litigation. Under the new tax regime, no income tax is payable up to Rs 12 lakh, and up to Rs 12.75 lakh for salaried taxpayers due to the standard deduction. Tax slabs have been revised to benefit all income groups. TDS and TCS norms have been rationalised to reduce compliance burden.
Fiscal deficit was estimated at 4.4% of GDP for the financial year 2025–26. Focus was also on agriculture, MSMEs, employment and skilling, energy and Indian exports.
To support urban development in the Union Budget of 2025, the FM announced Rs 1.5 lakh crore for states as 50-year interest-free loans for capital expenditure. To boost employment and skilling, a scheme for first-time entrepreneurs was announced to support 5 lakh women, as well as SC and ST entrepreneurs, with loans of up to Rs 2 crore.
Budget 2026 Expectations Live Updates: CII calls for faster, demand-driven PSU disinvestment
Industry body CII has proposed a faster, four-pronged strategy to unlock value from the disinvestment of public sector enterprises, advocating a demand-driven selection of units for privatisation and a clear, predictable roadmap.
In its recommendations for the Union Budget 2026–27, CII called on the government to raise resources through a calibrated privatisation programme, targeting sectors where private participation could improve efficiency, enable technology infusion and boost global competitiveness. The approach, it said, would help sustain capital expenditure and meet development priorities at a time of heightened global economic uncertainty.
Budget 2026 Expectations Live Updates: India likely to meet FY26 fiscal deficit target, says PwC
The government is expected to meet its fiscal deficit target of 4.4% of GDP for FY26 and may even perform better, sending a positive signal to global investors about India’s fiscal discipline, according to Ranen Banerjee, Partner at PwC and leader of its Economic Advisory Services, according to a PTI report.
Recent concerns arose after the National Statistical Office revised the nominal GDP growth target from 10.1% to 8%, raising doubts about meeting the fiscal deficit goal. Banerjee noted that despite the downward revision, the absolute numbers remain close to budget estimates. This means the denominator hasn’t shrunk significantly, and the government should be able to comfortably achieve the 4.4% fiscal deficit target.
Budget 2026 Expectations Live Updates: Odisha seeks centre’s support for road and NH projects
The Odisha government has requested the Centre’s support for the development of roads and National Highways projects in the state, involving an investment of Rs 41,580 crore, according to PTI.
Deputy Chief Minister Pravati Parida raised the demand during the pre-Budget consultation meeting of finance ministers from all states and Union Territories, chaired by Union Finance Minister Nirmala Sitharaman in New Delhi on Saturday.
The meeting was held to gather suggestions from states and UTs for the Union Budget 2026-27. On behalf of Odisha, Parida submitted a written memorandum highlighting key proposals and issues for the Finance Minister’s consideration in the upcoming Budget.
Budget 2026 Expectations Live Updates: Micro-fertiliser industry seeks uniform 5% GST
The Indian Micro-Fertilizers Manufacturers Association has asked the Centre to extend the 5% GST rate to all fertilisers listed under the Fertiliser Control Order, clear pending refunds of excess GST credits, and introduce a unified licensing system before the Union Budget.
The association welcomed GST 2.0 as a “landmark reform,” especially the reduction of GST from 12% to 5% on Schedule 1G fertilisers and their mixtures. However, it said manufacturers are now dealing with an inverted duty structure, where some raw materials and services attract higher GST than the final products, causing financial strain for the industry.
Budget 2026 Expectations Live Updates: Karnataka seeks GST revenue protection, higher share of tobacco excise
The Karnataka government has urged the Centre to ensure revenue protection for states after GST rationalisation in the upcoming Union Budget 2026-27. It has also asked for a greater share of excise duty and cess collected from pan masala and tobacco products, along with the release of pending Central dues under major schemes like the Jal Jeevan Mission. The state further requested stronger financial support for rural jobs, agriculture, and social welfare programmes, as per ANI.
These demands were placed during the pre-Budget consultations held in New Delhi on Saturday, chaired by Union Finance Minister Nirmala Sitharaman. Karnataka was represented by Revenue Minister Krishna Byre Gowda.
As per tradition, the Union Budget for 2026-27 will be presented on February 1.
Budget 2026 Expectations Live Updates: CII urges calibrated privatisation to boost growth
The Confederation of Indian Industry (CII) has urged the government to adopt a measured approach to privatisation in the Union Budget 2026-27, saying it would help sustain capital expenditure and meet development goals at a time of global economic uncertainty. The industry body said privatisation should focus on sectors where private players can improve efficiency, bring in better technology, and strengthen India’s global competitiveness, as per ANI report.
CII Director General Chandrajit Banerjee said that in the current international environment, privatisation holds strategic importance. He added that India’s growth is increasingly being driven by private enterprise and innovation, and the right reforms can further accelerate this momentum.
Budget 2026 Expectations Live Updates: Goa CM seeks fairer funding share
Chief Minister Pramod Sawant has urged the Centre to adopt a more equitable funding pattern for centrally sponsored schemes, saying Goa’s unique coastal challenges, the ecological sensitivity of the Western Ghats, and the state’s national tourism responsibilities must be taken into account, according to PTI.
Sawant attended the pre-Budget meeting for the Union Budget 2026-27 in New Delhi on Saturday, chaired by Union Finance Minister Nirmala Sitharaman and attended by finance ministers and senior officials from various states and Union Territories.
In a statement later, Sawant said the meeting included detailed discussions on the key priorities and provisions for the upcoming Union Budget.
Budget 2026 Expectations Live Updates: Telangana seeks higher fiscal deficit limit
The Telangana government has asked the Centre to raise the fiscal deficit limit to at least 4% of the state’s GSDP, instead of the usual 3.5%, saying this would help contribute to the ‘Viksit Bharat’ vision. The state has also requested that the 50-year interest-free loans given to states be converted into grants.
Speaking at the pre-Budget meeting in New Delhi on Saturday, Telangana Deputy Chief Minister Mallu Bhatti Vikramarka said the state will need more resources to build public infrastructure and lift its capital investment rate from the current 37% to 50% of GSDP in order to move toward becoming a USD 3-trillion economy by 2047.
Budget 2026 Expectations Live Updates: Delhi seeks approval to procure 3,330 electric buses
The Delhi government has submitted a detailed proposal to the central agency Convergence Energy Services Limited (CESL) for the urgent procurement of 3,330 electric buses.
Chief Minister Rekha Gupta said the government has asked the Centre and the Ministry of Heavy Industries to include this extra requirement—separate from the already approved quota of 2,800 buses—under the subsidy scheme.
She also said that if there are any technical issues with granting subsidies, the Delhi government is ready to cover the costs on its own to ensure there is no delay in bringing these buses into the fleet.
Budget 2026 Expectations Live Updates: Punjab seeks fiscal aid and special economic package
Punjab Finance Minister Harpal Singh Cheema on Saturday urged the Centre to provide urgent financial support and announce a special economic package for the state, highlighting the challenges Punjab faced in 2025, including border tensions and severe floods.
Cheema presented these demands during a pre-Budget meeting with Union Finance Minister Nirmala Sitharaman in New Delhi. He submitted a detailed memorandum outlining Punjab’s key financial needs and policy requests for the Union Budget 2026-27.
Budget 2026 Expectations Live Updates: Kerala seeks special central package
The Kerala government on Saturday told the Centre that the state is facing a serious financial crisis driven by several factors, including mid-year GST rationalisation, reciprocal tariff measures by the US, and a shrinking share in the divisible pool. Because of this, the state has asked the Union government for a special financial package, according to PTI.
State Finance Minister K N Balagopal, in his pre-Budget submission, said these “overlapping economic shocks” - along with reduced central assistance under Centrally Sponsored Schemes (CSS) and unexpected cuts in Kerala’s borrowing limit - have weakened the state's revenue, slowed growth, and put pressure on its fiscal stability.
He said the state has suffered losses worth thousands of crores due to these issues, hurting its ability to fund essential services, welfare schemes, and infrastructure projects. Kerala has therefore requested a special fiscal correction package to address what he described as a resource gap of over Rs 21,000 crore caused by this year’s borrowing restrictions.
Budget 2026 Expectations Live Updates: Haryana seeks higher budget support for rural, urban infra
Haryana Chief Minister Nayab Singh Saini on Saturday urged the Centre to significantly increase funds for the state’s rural and urban infrastructure, as well as agriculture and related sectors, in the Union Budget for FY27. He said Haryana’s fast-growing development needs and its location near the national capital make higher allocations necessary, according to PTI.
Saini, who also serves as the state’s finance minister, made these requests during a pre-Budget meeting chaired by Union Finance Minister Nirmala Sitharaman. The meeting included finance ministers from various states and Union Territories.
He asked the Centre to raise the general allocation under the Rural Infrastructure Development Fund (RIDF) to Rs 2,000 crore for 2026-27, saying it was important to maintain the pace of rural growth. Saini also pointed out issues with the Urban Infrastructure Development Fund (UIDF), noting that the current Rs 100 crore project cap prevents large urban projects from moving forward. He proposed increasing this limit to Rs 500 crore.
Budget 2026 Expectations Live Updates: Major income tax relief for middle-class families
The Union Budget 2025 introduced several income tax relief measures aimed at easing the financial load on taxpayers. This was Finance Minister Nirmala Sitharaman’s eighth Budget, and it delivered clear benefits for the middle class.
With revised tax slabs, a higher exemption limit and a continued push for the new tax regime, many households are now expected to see a lower tax burden, providing much-needed breathing room in their monthly budgets.
Budget 2026 Expectations Live Updates: Nirmala Sitharaman chairs pre-Budget meeting
Union Finance Minister Nirmala Sitharaman on Thursday chaired a pre-Budget consultation with Finance Ministers from states and Union Territories in New Delhi. The meeting, held as part of the Centre’s annual pre-Budget exercise, was also attended by Minister of State for Finance Pankaj Chaudhary and senior officials from the Finance Ministry. The Budget Session of Parliament is set to commence on January 28.
Budget 2026 Expectations Live Updates: Nirmala Sitharaman chairs pre-Budget meeting
Union Finance Minister Nirmala Sitharaman on Thursday chaired a pre-Budget consultation with Finance Ministers from states and Union Territories in New Delhi. The meeting, held as part of the Centre’s annual pre-Budget exercise, was also attended by Minister of State for Finance Pankaj Chaudhary and senior officials from the Finance Ministry. The Budget Session of Parliament is set to commence on January 28.
Budget 2026 Expectations Live Updates: ICRA sees steady growth in railways’ FY27 budget allocation
Rating agency ICRA expects railways’ budgetary allocation to see a range-bound increase in FY2026–27, in line with the 5% year-on-year growth recorded in FY2025. With electrification nearing completion, the focus is set to shift toward easing congestion through capacity augmentation, including new routes, gauge conversion, track doubling, and dedicated freight corridors.
“Infrastructure modernisation, including rolling stock upgrades and station redevelopment, alongside safety enhancements, will remain critical. Within capacity expansion, economic corridors, coupled with accelerated deployment of Kavach 4.0 and advanced signalling across the network, are expected to dominate both budgetary priorities and execution strategies.”
Budget 2026 Expectations Live Updates: Education sector seeks skill support
Ayush Kumar, Managing Director of the New Delhi Institute of Management, says that the education sector is seeking a strong push towards future-ready skilling, affordability, and global competitiveness.
“We expect the Budget to focus on strengthening industry-academia partnerships, expanding support for digital learning infrastructure, and increasing incentives for research, innovation and incubation within educational institutions,” Kumar says.
“Equally important is the need to make quality higher education more accessible through enhanced education loans, interest subsidies, and tax benefits for students and parents. A forward-looking Budget that treats education as a national investment rather than an expense will go a long way in shaping India’s next generation of business leaders and job creators," he adds.
Budget 2026 Expectations Live Updates: FY26 GDP growth projected at 7.4%
The Ministry of Statistics & Programme Implementation on Wednesday released the First Advance Estimates of Gross Domestic Product (GDP) for FY26, pegging GDP growth at 7.4%. Nominal GDP is estimated to grow at 8.0%.
Real Gross Value Added (GVA) is projected to rise 7.3% in FY26, with the services sector emerging as the key growth engine.
The First Advance Estimates of GDP were keenly awaited as they serve as the base for Budget 2026 calculations.
The Second Advance Estimates will be released on February 27.
Budget 2026 Expectations Live Updates: PHDCCI says policy revision crucial for MSMEs
The industry body PHDCCI suggested the reintroduction of an interest subvention scheme for MSMEs, with a 2 per cent interest subsidy on new and incremental loans from banks and NBFCs. It argued that lower borrowing costs are expected to improve repayment discipline and enhance competitiveness.
It also pitched for upward revision of MUDRA loan ceilings, from Rs 50,000 to Rs 1 lakh for the Shishu category and from up to Rs 5 lakh to up to Rs 10 lakh for the Kishore category.
Budget 2026 Expectations Live Updates: EAC-PM chief Mahendra Dev says budget to focus of fiscal deficit
Mahendra Dev, Chairman of the Economic Advisory Council to the Prime Minister, said that the Budget is expected to focus on fiscal deficit control and debt sustainability as part of the government's broader Viksit Bharat roadmap.
"The budget is part of the Viksit Bharat roadmap and the drafters will stick to the fiscal deficit. Also, the debt to GDP is the main indicator, so they will stick to that," Dev said.
He said India has made steady progress on fiscal consolidation since the pandemic, with the fiscal deficit reducing from about 9% during the COVID period to around 4.8% this year. He added that the government is targeting a fiscal deficit of about 4.4% going forward.
Budget 2026 Expectations Live Updates: FM Sitharaman hold pre-budget meet with state and UT Finance Ministers
Union Finance Minister Nirmala Sitharaman is holding a pre-budget meeting with the Finance Ministers of States and Union Territories on Saturday.
At the meeting, the State and UT Finance Ministers will propose their recommendation for the Union Budget, which will be announced on February 1.
Budget 2026 Expectations Live Updates: Goldman Sachs says budget to support consumption demand
Goldman Sachs expects the budget to continue favouring measures that support household demand, through tax relief, GST rationalisation on consumption items and targeted transfers, particularly if uncertainty around US trade policy persists.
Goldman Sachs highlighted that, along with credit growth and strong rural demand, consumption growth is likely to be at 7.7% YoY CY26. Consumption growth thus far has been hovering around the 7% mark for the last two years, 2025, 2024, the banker said
Budget 2026 Expectations Live Updates: EY says manufacturing likely to see push
Paresh Parekh, Partner and National Leader for Tax – Consumer Products and Retail Sector, EY India said that the budget is likely to support the manufacturing sector, which is crucial for the growth of the retail sector.
“The Budget may also aim to provide support to Micro, Small, and Medium Enterprises (MSMEs) to boost their retail activities. There is also a focus on promoting digital payments to enhance the ease of doing business in retail." Parekh said.
“Targeted fiscal relief through lower personal taxes are expected to enhance disposable incomes and strengthen consumer sentiment, directly stimulating retail growth.” he added
Budget 2026 Expectations Live Updates: How can budget catalyse carbon emissions reduction through logistics incentives?
Nikhil Agarwal, President, CJ Darcl Logistics, said that the Budget can play a catalytic role by introducing outcome-based incentives linked to measurable carbon emission reductions in logistics operations.
Encouraging adoption of alternate fuels and electric mobility, along with investments in charging and refuelling infrastructure, will enable fleet operators to transition sustainably without compromising economics, Agarwal added.
“A policy framework that rewards lower emissions, promotes multimodal transport, and strengthens human capital will position logistics as a key enabler of India’s competitive, resilient, and low-carbon growth," Agarwal said
Budget 2026 Expectations Live Updates: Retail sector look for clarity on National Retail Policy
Kinjal Shah, Senior Vice President & Co-Group Head, Corporate Sector Ratings, ICRA says that steps to improve personal disposable income to spur consumer sentiments and consumption remain the key expectation of the Indian retailers from the upcoming Budget.
“Additionally, entities are hopeful that the Budget will provide long-awaited clarity on implementation of National Retail Policy, which focuses on ease of doing business by rationalising the licensing processes, enhancing the credit inflow, particularly to MSMEs and improving supply chain infrastructure.” Shah added.
She says that implementation of national e-commerce policy, which streamlines regulations and improves transparency across e-commerce platforms would be critical to boost investor confidence
Budget 2026 Expectations Live Updates: Defence, green energy, urban infra seen as key Budget 2026 priorities
Gaurav Garg, Research Analyst at Lemonn Markets Desks, expects Budget 2026 to prioritise defence, green energy, and urban infrastructure, while most other sectors may see only modest increases in allocation.
According to Garg, spending on health, education, and traditional infrastructure is likely to grow incrementally rather than through large-scale funding jumps, reflecting a cautious fiscal approach.
Focus on strategic allocation over big-ticket announcements
In a note, Garg said the upcoming budget is expected to emphasise disciplined spending, targeted capital deployment, and greater participation from the private sector. He added that the government’s approach this year is likely to centre on strategic prioritisation instead of headline-grabbing announcements.
Budget 2026 Expectations Live Updates: New airports and capacity expansion likely
Kinjal Shah, Senior Vice President & Co-Group Head, Corporate Sector Ratings, ICRA, says that the budget 2026 is expected to reiterate the focus on improving regional connectivity through the Regional Connectivity Scheme (RCS) or Ude Desh ka Aam Nagrik (UDAN).
“The Budget is also likely to focus on setting up new airports and expanding the existing airport capacities at some key airports to help address the current airport infrastructure constraints faced by the airlines and to improve connectivity with the underserved/unserved destinations to boost tourism.” Shah added.
She elaborates that the development of new tourist attractions, promotion of medical tourism and streamlining of e-visa facilities, which will boost international tourism in India, are also expected to remain the key focus areas.”
Budget 2026 Expectations Live Updates: Extension of PLI schemes for new tech
EY India suggested adopting a forward-thinking approach that reinforces investor confidence and catalyses private sector participation. At a time when the economy is positioned for further growth, the Budget must serve as a strategic blueprint that aligns fiscal discipline with ambitious growth objectives, ensuring that India remains a competitive player on the global stage, the firms said.
“To stimulate private investments, the existing Production-Linked Incentive (PLI) scheme may be extended to cover new technology sectors such as AI, space, and robotics. Additionally, public infrastructure investments in futuristic areas, including AI, GenAI, robotics, and space technology, may induce growth of private investment in these sectors. Targeted incentives for the emerging industries will be crucial in driving innovation and attracting both domestic and foreign investors. On the tax front, businesses look for a strong commitment to tax certainty and streamlined compliance processes”, Sameer Gupta, National Tax Leader, EY India said.
Budget 2026 Expectations Live Updates: Pharma sector expects GST rationalisation and tax incentives
Mytri Macherla, Vice President & Sector Head – Corporate Ratings, ICRA said that the upcoming budget is likely to focus on preventive healthcare given the significant rise in non-communicable and lifestyle diseases in the country.
“To boost investments in the sector, tax incentives for private sector investments in modernising medical facilities, especially in tier-2 and tier-3 cities and developing greenfield hospitals in rural areas will be a welcome step. Further, given the low doctors-to-people and nurses-to-people ratio, increased allocation towards training medical personnel would be highly beneficial.” she added.
Macherla said that the pharma sector seeks rationalisation of GST rates on key raw materials to address the inverted duty structure, restoration of tax incentives on R&D spend, and expansion of PLI schemes to strengthen API self-reliance. Increased public healthcare spending and targeted incentives for biopharma innovation are critical to sustain growth.
Budget 2026 Expectations Live Updates: Tech sector expects policy support
Raghu Pareddy, CEO & Founder of Wissen Technology, says that as India prepares the upcoming Union Budget 2026, the technology and startup ecosystem is expecting for strong policy support, and fiscal measures to accelerate innovation, deepen digital infrastructure, and strengthen global competitiveness.
“An understanding to enhance funding for deep-tech, AI, data, and cybersecurity startups, rationalised tax and ESOP reforms, and simplified compliance will be the key to enabling sustainable growth. Continued focus on AI, data centres, semiconductor design, and R&D incentives will help build long-term digital resilience, while large-scale upskilling initiatives can address the growing tech talent gap.” Pareddy adds.
Pareddy says that a forward-looking budget that treats technology as a core economic enabler will be critical in positioning India as a global hub for innovation and digital services.