Budget Expectations 2026 LIVE Updates: The countdown to Union Budget 2026 has begun. Finance Minister Nirmala Sitharaman will present her ninth Budget, and the 88th since Independence, on Sunday, February 1, amid expectations of a sharper policy thrust towards reviving consumption in a slowing global environment.
Economists and industry bodies expect the government to build on last year’s tax relief and GST rationalisation to sustain household demand, even as fiscal space remains constrained. The broad view is that Budget 2026 will prioritise targeted support over headline-grabbing capex announcements.
Where the focus is likely to be
Market participants expect the Budget to concentrate on five key areas: fiscal and policy support, defence, MSMEs, railways and infrastructure, and the green transition.
Ratings agency ICRA expects railways to remain a key beneficiary. With electrification largely complete, the emphasis is likely to shift towards easing congestion and expanding capacity through new lines, track doubling, gauge conversion and progress on dedicated freight corridors.
Another key focus area for Budget 2026 is MSMEs. As per a report by the PHD Chamber of Commerce and Industry, the government is urged to improve access to finance, reduce regulatory friction and lower compliance costs to enhance global competitiveness.
Budget 2026 is expected to carry forward last year’s consumption push. Under the revised regime, income up to Rs 12 lakh was exempt from tax, rising to Rs 12.75 lakh for salaried taxpayers after the standard deduction. Tax slabs were rationalised across income levels, while TDS and TCS norms were eased.
What industry want from the Budget now
The industry is looking to Budget 2026 as a signal of policy stability rather than short-term stimulus. According to EY’s budget expectations, with global capital cautious, businesses want the government to double down on tax certainty, reduce litigation and create clearer pathways for private investment, especially in emerging technology and manufacturing-led sectors. The expectation is that the Budget will favour targeted incentives and compliance reform over frequent changes in rates or rules.
Budget 2026 Live Updates: Why the old tax regime may not be scrapped just yet
Although it has been a while since the new tax regime, the government is unlikely to abolish the old system abruptly. India’s savings ecosystem, built around provident funds, insurance, pensions and home loans, relies heavily on tax-linked incentives.
A sudden withdrawal could disrupt long-term financial planning for millions. Policymakers also see value in a dual system that balances consumption and savings. Instead of a hard stop, the strategy so far has been gradual dilution, allowing the old regime to fade over time while avoiding behavioural shocks or legal complications.
Read more: Budget 2026 to finally scrap old tax regime? Why experts feel it will further lose relevance
Budget 2026 Live Updates: Simpler taxes, fewer deductions driving new regime adoption
Beyond lower tax rates, simplicity has emerged as the strongest pull of the new tax regime. Taxpayers no longer need to track exemptions, maintain paperwork, or worry about scrutiny over deductions.
For the tax department, fewer claims mean easier administration and lower litigation risk. Experts say this aligns with the government’s broader goal of phasing out exemptions to create a cleaner, more transparent tax system.
Read more: Budget 2026 to finally scrap old tax regime? Why experts feel it will further lose relevance
Budget 2026 Live Updates: Why most taxpayers are shifting to the new income tax regime
The government’s repeated tweaks to the new tax regime have steadily eroded the advantages of the old system. Successive slab rationalisations and a Rs 12 lakh tax-free threshold have made the new regime financially attractive for a large majority of taxpayers.
Experts estimate that over 80% of taxpayers may now be using the new regime, up from around 75% earlier.
Read more: Budget 2026 to finally scrap old tax regime? Why experts feel it will further lose relevance
Budget 2026 Live Updates: Cement demand seen growing 6–7% in FY27 on infra, housing push: ICRA
A sustained policy focus on infrastructure, the rural economy and affordable housing in the upcoming Union Budget FY27 is expected to support healthy growth for the cement sector, according to ICRA.
The ratings agency projects cement demand to rise by 6–7% in FY27, driven largely by government spending on roads, railways, metro projects and urban infrastructure.Rural housing and infrastructure already account for nearly 50–55% of cement consumption, underlining their central role.
“Increased Government allocations towards roads, railways, metro projects, and urban infrastructure should translate into healthy volume visibility for cement manufacturers. While the full impact of GST rate rationalisation remains to be seen, sustained infrastructure spending and policy stability are expected to provide earnings visibility for cement companies.” Maitri Vira, Assistant Vice President & Sector Head, ICRA, said.
Budget 2026 Live Updates: Why Rs 12 lakh tax-free doesn’t mean zero tax for all taxpayers
Ahead of Budget 2026, taxpayers are revisiting last year’s headline-grabbing income tax relief. While Budget 2025 exempted income up to Rs 12 lakh under the new tax regime, the benefit applies only to normal income such as salary or business earnings.
Special rate income, including capital gains, remains taxable even if total income stays within the threshold. For salaried individuals, the effective tax-free limit rises to Rs 12.75 lakh due to the standard deduction. However, taxpayers with capital gains may still face tax outgo.
Read More: Budget 2026: Your Rs 12 lakh annual income isn’t fully tax-free if it includes this component
Budget 2026 Live Updates: FICCI pushes for Mega Electronics Industrial Park to boost domestic manufacturing
Ahead of Budget 2026–27, FICCI has urged the government to set up a Mega Electronics Industrial Park, co-locating OEMs, EMS firms, and component suppliers to deepen the domestic value chain and enhance global competitiveness.
The industry body highlighted PCB assemblies as a key bottleneck and recommended unified HS Codes to simplify tariffs and boost local manufacturing.
FICCI also called for better access to critical minerals, green infrastructure, and MSME support.
Budget 2026 Live Updates: Centre likely to raise FY27 capex to Rs 12.5 lakh crore, focus on state-level loans
While the capital expenditure was pegged at around Rs 11 lakh crores in the past two years, the government is expected to increase this in Budget 2026 with an estimate of Rs 12.5 lakh crore. This will maintain the capex-to-GDP ratio around 3%.
From a public finance perspective, a 3% capex ratio is considered optimal, much like the original Fiscal Responsibility and Budget Management (FRBM) Act’s benchmark of a 3% fiscal deficit.
Much of the incremental outlay may be directed towards the Scheme for Special Assistance to States for Capital Investment. Under this programme, the Union government provides 50-year interest-free loans to states for capital spending.
ICRA chief economist Aditi Nayar expects the government to first raise FY26 gross capex by about Rs 20,000-30,000 billion to roughly Rs 11.5 lakh crore from the budget estimate of Rs 11.2 lakh crore. “Thereafter, the GoI is likely to peg the gross capex at around Rs 13.1 lakh crore in the FY27 BE, implying a 14% growth on the enhanced base,” she said. According to Nayar, most of the increase in FY27 is likely to come from a higher outlay for the capex loan scheme for states.
Read More: Capex budget may be raised to Rs 12.5 L cr for FY27
Budget 2026 Live Updates: Bandhan Life CEO expects GST waiver momentum to extend to expand insurance coverage
“The GST waiver has made life insurance more affordable and accessible. We’re hopeful that this year’s Budget will continue that momentum. Better tax benefits for protection and health plans—under both tax regimes—can help more families get covered. We also hope to see stronger support for pension products and an increase in the premium cap for ULIPs to Rs. 5 Lakh, similar to traditional plans. Simple, inclusive reforms can go a long way in securing India’s financial future and accelerate progress towards ‘Insurance for All by 2047’,” Satishwar B., MD & CEO of Bandhan life said.
Budget 2026 Live Updates: Hospitality sector seeks tourism push as demand outpaces supply, says ICRA
India’s hospitality industry continues to operate in a favourable demand-supply environment, even as foreign tourist arrivals remain below pre-pandemic peaks, according to ICRA.
“However, foreign tourist arrivals are still below past peak levels. ICRA expects the upcoming Union Budget to continue its focus on tourism and infrastructure investments, ease of doing business, enhanced connectivity and accessibility.” Srikumar Krishnamurthy, Senior Vice President & Co-Group Head, Corporate Ratings, ICRA said.
The ratings agency expects Budget 2026 to sustain its focus on tourism-led infrastructure, improved connectivity and ease of doing business to support the sector’s next growth phase. With room demand continuing to outstrip new supply additions, ICRA said supportive policy frameworks, including easier access to financing, will be critical to enable inventory expansion.
India’s passenger vehicle market has delivered a timely signal ahead of Budget 2026. December dispatches jumped 27% year-on-year to nearly 4 lakh units, the strongest monthly growth of 2025, after GST cuts announced in September.
SIAM data shows October–December volumes hit a record 1.28 million units, prompting brokerages to upgrade FY26 growth estimates to about 8%, from earlier expectations of 1–2%. The rebound has reopened the debate on automobile tax rationalisation.
With autos heavily taxed but deeply linked to manufacturing demand, the December surge strengthens the case for viewing tax relief as a growth lever, not merely a revenue risk.
Read More: Record 27% surge in December car sales puts Maruti, Hyundai and M&M in focus ahead of Budget 2026
Budget 2026 Live Updates: CII seeks clarity on tax rules for gratuity, leave encashment and terminal benefits
CII has sought clearer rules on the tax treatment of gratuity, leave encashment, and terminal benefits, noting that ambiguity in existing provisions often leads to disputes at the time of retirement or separation.
" There is a lot of confusion in respect of TDS/taxability of various payments like gratuity, leave encashment and other terminal benefits received by the legal heirs of a deceased employee," CII said.
"The existing circulars on these subjects need to be updated based on the current Income Tax Law," CII recommended.
Budget 2026 Live Updates: Expectation from Aviation sector
As the government prepares the Budget for 2026–27, the aviation sector is seeking less in the way of fresh promises and more tangible execution. Domestic air passenger traffic reached 944.5 lakh in the first seven months of FY26, even as capacity constraints at key airports became increasingly evident, ICRA noted.
Now the world’s third-largest aviation market, India is expected to see a budget that emphasises continuity, particularly in regional connectivity, airport capacity augmentation and tourism-driven demand. The sector’s economic footprint remains substantial, supporting more than 7.7 million jobs, including around 3.7 lakh direct positions, according to IATA and government estimates.
Yet financial pressures persist. India’s domestic airline industry is projected to incur net losses of Rs 9,500–10,500 crore in FY26, as passenger growth moderates and cost pressures mount, PTI reported.
Budget 2026 Live Updates: India’s AI moment of truth
India’s pace in the global AI race may be measured rather than meteoric, but Budget 2026 could prove decisive in shaping the country’s domestic AI ambitions.
According to Deloitte’s budget expectations, the industry’s AI wishlist centres on strong fiscal backing for data centres, from conditional tax holidays and full GST input tax credits on capital-intensive assets to multi-year customs duty waivers on critical imports such as GPUs, cooling systems and UPS equipment. Deloitte has also highlighted the need for a compute-credit scheme that would allow startups and research labs to access discounted GPU or TPU hours on domestic infrastructure.
While allocations under the IndiaAI Mission have already been stepped up and GPU capacity expanded, the ecosystem is now watching closely for clear, targeted fiscal levers in the fine print of the full Budget.
Budget 2026 Live Updates: Taxation experts seeks clarity on litigation issue and faster dispute resulution
Smita Singh, Partner ( Indirect Tax ) at S&A Law Offices, says that 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, she adds.
“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.” Singh says.
“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.”
Budget 2026 Live Updates: Telecom body seeks reduction in regulatory fee
The industry body of telcos, COAI, has sought a reduction in regulatory levies, including the licence fee, to 0.5-1 per cent from three per cent, in the upcoming Budget.
In its submission to the government, the Cellular Operators Association of India (COAI) suggested that funds to the Digital Bharat Nidhi should be paused till the time unused corpus is completely utilised by the telecom department.
"The licence fee, which is a combination of the licence (three per cent of AGR) and Digital Bharat Nidhi Contribution (five per cent of AGR), is a huge financial burden for the licensed telcos," the association said.
COAI has requested that the licence fee be reduced from 3 per cent to 0.5-1 just to cover the administrative costs.
Budget 2026 Live Updates: ICRA expects budget capita outlay for roads to be healthy
ICRA expects the capital outlay for the road sector to remain healthy in FY2027 BE with a range bound increase over FY2026 BE, which is likely to support the improvement in road execution.
Suprio Banerjee, Vice President & Co-Group Head, ICRA said that roads and highways continue to dominate government capex, which has consistently accounted for around 25% of budgetary allocation over the past five years and is expected to remain at similar levels going forward.
“The Ministry had spent Rs. 2.85 lakh crore (105%), higher than the Rs. 2.72 lakh crore of the revised budget allocation in FY2025. In line with past trends, the Ministry is expected to fully utilise the budgetary support in FY2026 as well, given that road construction through 8M FY2026 is largely in line with 8M FY2025 levels. In line with earlier year budget announcements, the government is expected to continue with nil borrowing program for the NHAI while keeping the allocations at healthy levels to the authority.” Banerjee added.
Budget 2026 Live Updates: Pharma, Healthcare Seek R&D Push, Preventive Care Focus
The healthcare and pharmaceutical sectors are looking to Budget 2026–27 for sharper fiscal signals to support innovation-led growth. Industry bodies have urged the government to offer globally competitive R&D incentives, restore weighted tax deductions and rationalise GST to help the pharma industry scale to $120–130 billion by 2030, according to PTI.
“The industry seeks globally competitive R&D incentives that align with India’s innovation ambitions,” said Sudarshan Jain, secretary general of the Indian Pharmaceutical Alliance.
On healthcare delivery, ICRA expects a stronger focus on preventive care, medical workforce training and incentives for modernising facilities in tier-2, tier-3 and rural areas.
Read more: What healthcare wants from Budget 2026–27
India’s real estate sector does not require a demand-led revival in 2026 but needs a structural reset on the supply side, said Mehernosh Tata, MD & CEO of Godrej Housing Finance, a subsidiary of Godrej Capital. He said the next phase of sustainable growth will be driven by execution efficiency rather than short-term consumption incentives.
He stressed that access to predictable, long-term financing is far more critical for the sector than temporary liquidity measures. Housing projects typically span several years, while financing structures often fail to align with these timelines, increasing execution pressure on developers.
“For real estate to scale sustainably, access to predictable, long-term financing is far more important than short-term liquidity. Housing projects run over several years, but financing often does not match this timeline, increasing execution pressure on developers,” he said, adding that Budget measures supporting stable funding channels—especially for construction-stage lending—would ease refinancing stress and improve cash-flow planning.
“ICRA anticipates a range-bound increase in Railways’ budgetary allocation for FY2026–27, given the trend seen over the past two years (~5% YoY growth in FY2025 and FY2026BE to reach Rs. 2.65 lakh crore, including EBR of Rs. 10,000 crore),” Suprio Banerjee, Vice President & Co-Group Head, ICRA, said.
Furthermore, he added that focus will remain on decongestion 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 (e.g. ports and mineral logistics) coupled with accelerated deployment of Kavach 4.0 and advanced signalling across the network, are expected to dominate both budgetary priorities and execution strategies, Banerjee added.
Budget 2026 Live Updates: 'Clear norms and responsible lending key as digital credit'
Shruti Aggarwal, Co-founder of Stashfin, said consumer protection must remain central as digital credit gains wider adoption, calling for stronger policy support in the upcoming Budget.
Aggarwal expects the Budget to reinforce “clear disclosure norms, effective grievance redressal, and responsible lending practices across digital platforms” to maintain trust among consumers.
She also highlighted the role of fintech firms in expanding access to credit, noting, “Fintech leaders like us also have a meaningful responsibility in expanding access to credit for young and first-time borrowers.” Aggarwal said the use of technology and alternative data can help assess creditworthiness of “salaried millennials, gig workers, and new-to-credit consumers” who are underserved by traditional models.
According to her, “Policy support that allows responsible innovation, while maintaining regulatory oversight,” can help bring more borrowers into the formal credit system in a sustainable and transparent manner.
Ahead of Budget 2026, India’s fertiliser makers, the Indian Micro-Fertilisers Manufacturers Association, are pleading for an escape from a financial "tax trap." While the government’s push to lower GST on fertilisers was a win for farmers, it created an inverted duty structure that is choking manufacturers.
Companies are paying high tax rates on raw materials and services, but can only charge 5% on their final products.
To resolve this, the industry is urging the Finance Minister to expand the 5% GST rate to all fertilisers and simplify the bureaucratic maze with a unified licensing system. Clearing the backlog of pending tax refunds is the top priority; for these manufacturers, getting their own money back is the key to keeping the "Green Revolution" affordable.
Budget 2026 Live Updates: Startups seeks an end to ‘double tax’ on ESOPs
India’s startup ecosystem is pinning high hopes on Budget 2026 for major policy reforms, especially around ESOP taxation and carry-forward of losses.
Karthik Narayan, Senior Vice President – Title, Tax & Transition at Stellar Innovations, said founders and investors are seeking an end to the current “double tax affair” on Employee Stock Ownership Plans (ESOPs). At present, ESOPs are taxed both at the time of exercise and at sale, pushing the tax burden beyond 40%.
“Founders and investors ask to move from the current double tax affair on Employee Stock Ownership Plans, which means a tax at exercise and sale, usually a burden of over 40%, to one tax point at redemption,” Narayan said. He added that a five-year tax deferment for startups, followed by a 10–15% tax rate, would align India with Singapore and the US.
According to him, such a move would help retain top talent in fintech, AI, deep tech and UI/UX, curb brain drain, boost productivity, and support the creation of more unicorns.
Narayan also stressed the need to ease rules on carry-forward losses. He called for extending the current eight-year limit to 15 years, removing the 50% profit offset cap, and scrapping shareholding change restrictions that hurt bootstrapped startups, especially in real estate tech and furniture e-commerce.
“More than 70% of early-stage startups have unabsorbed losses over Rs 50,000 crores post-pandemic. Using these would be like giving them money for reinvestment and thus creating 100,000 jobs every year,” he said.
In addition, Narayan urged the government to set up a Rs 15,000 crore Deep Tech Fund-of-Funds, abolish angel tax, and raise the GST threshold to Rs 1.5 crore in turnover.
Budget 2026 Live Updates: Aviation sector seeks focus on execution, regional connectivity
As the government readies Budget 2026–27, the aviation sector is looking less for new announcements and more for delivery. Domestic air passenger traffic touched 944.5 lakh in the first seven months of FY26, even as infrastructure constraints at major airports became more visible, according to ICRA.
With India now the world’s third-largest aviation market, the budget is expected to prioritise continuity, especially regional connectivity, airport capacity expansion and tourism-led demand creation. Employment and economic contribution remain significant, with the sector supporting over 7.7 million jobs, including nearly 3.7 lakh direct roles, as per IATA and government data.
However, financial stress persists. The domestic airline industry is projected to post net losses of Rs 9,500–10,500 crore in FY26 amid moderating passenger growth and rising costs, according to PTI.
Read more: Budget 2026 and what lies ahead for India’s aviation sector
Budget 2026 Live Updates: "Domestic production of high-end medical equipment can boost healthcare resilience'
A balanced approach that reinforces healthcare infrastructure, technology adoption and supply-side resilience will be critical to strengthening the overall healthcare ecosystem in the years ahead, says Vipul Jain, CEO of CK Birla Hospitals for the healthcare sector.
Jain said, "One of the critical areas to watch will be policy support for domestic manufacturing of advanced medical equipment. Today, a significant share of cutting-edge technology used in hospitals, from imaging systems to surgical platforms, continues to be imported from Western markets and China, even as clinical demand for these technologies is growing rapidly. If similar equipment were manufactured at scale in India, costs could eventually be materially lower, much like what the automotive sector has demonstrated with domestic production of high-end vehicles. Beyond cost, local manufacturing would also strengthen supply reliability, enhance service support, and enable long-term technology adoption across hospitals."
"Further policy incentives to accelerate domestic manufacturing would help build a more resilient medical technology ecosystem, while enabling wider and more affordable access to high-quality care over time,” he added.
Budget 2026 Live Updates: AI ecosystem seeks big push on data centres
India’s share in the global AI race might be relatively slow; however, Budget 2026 can be a make-or-break moment for building the country’s domestic AI capabilities.
According to Deloitte’s budget expectations, at the core of the AI wishlist is fiscal support for data centres, including conditional tax holidays, full GST input tax credits on capital-intensive assets and multi-year customs duty waivers on critical imports such as GPUs, cooling systems and UPS equipment. Deloitte also flagged the need for a compute-credit scheme to help startups and research labs access discounted GPU or TPU hours on domestic infrastructure.
While the IndiaAI Mission has already seen stepped-up allocations and GPU expansion, the industry awaits clearer fiscal levers in the full budget fine print.
Read more: Budget 2026 wishlist: Will AI data centres get a 20-year tax holiday? 3 big moves to watch
Budget 2026 Live Updates: Deloitte calls for National Cyber Command, Sectoral CERTs
As per Deloitte’s budget expectations, the firm has asked the government to create a national cybersecurity command in order to streamline the multiple cyber guidelines and improve threat coordination across various sectors.
In addition to this, the firm also recommended sector-specific CERTs and SOCs, because every sector will require an industry tailored cuyer response, especially banking and OT/IoT-driven industries.
Deloitte also calls for a secure government cloud platform, ideally led by NIC, to enable faster rollout of the digital initiatives.
Budget 2026 Live Updates: CPI Inflation Slips to 1.3% in December
Headline CPI inflation fell to 1.3% year-on-year in December 2025, according to government data released yesterday, a month ahead of the Union Budget.
CPI has remained below the RBI’s lower tolerance band of 2% for six consecutive months, despite a slightly unfavourable base effect.
Economists at Bank of Baroda expect Q4FY26 headline CPI to be in the range of 2.5–3.0%. They noted that the upcoming Budget and the new CPI series would further shed light on the inflation outlook.
Budget 2026 Live Updates: What time will Budget presentation begin on Feb 1?
Lok Sabha Speaker Om Birla on Monday confirmed that Finance Minister Nirmala Sitharaman will present the Union Budget 2026-27 on February 1, which happens to be a Sunday.
The Finance Minister will begin the presentation of the Budget at 11 a.m. in the lower house on February 1, the Speaker said in response to a question at a press conference.
The Budget Session of the Parliament will commence on January 28 and will continue till April 2.
-via IANS
Budget 2026 Expectations Live Updates: ICRA says oil sector may seek support
According to ICRA's Srikumar Krishnamurthy, Senior Vice President & Co-Group Head, Corporate Ratings, the net under recoveries on LPG (domestic) sales will aggregate to nearly Rs 30,000 crore, which may prompt the oil companies to seek companies from the central government. He added that major Indian oil players may also seek a reduction on crude oil, restoration of tax holidays for new blocks and exemption of GST from new exploration activities.
"The industry also wants lower GST rates or exemptions for pipeline construction materials, CNG, and biogas. The midstream industry is requesting the removal of the 2.5% customs duty on LNG imports to make natural gas more widely used as a fuel. The industry incumbents also want natural gas and petroleum products to be included under GST to enable free flow of tax credits and avoid stranded taxes." Vashist said in a note.
Budget 2026 Expectations Live Updates: Aviation sector eyes connectivity and airport expansion
India’s aviation sector can expect continuity rather than fresh policy shifts in Budget 2026, with the government likely to reinforce its focus on regional connectivity and airport infrastructure, according to ICRA.
“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),” Kinjal Shah, senior vice president and co-group head, corporate sector ratings at ICRA Ltd, said.
She added that the budget is also likely to prioritise the development of new airports and capacity expansion at key existing airports to ease infrastructure constraints faced by airlines and improve access to underserved and unserved destinations, supporting tourism growth.
Beyond domestic travel, government is expected to continue focusing on the development of new tourist attractions, promote medical tourism and streamline e-visa facilities, Shah added.