Finance Minister Nirmala Sitharaman is set to present the Union Budget 2026 on February 1. All eyes are on the key benefits and the sops that are expected to be announced by the Finance Minister.
The popular expectation ranges from Govt staying the course on fiscal consolidation to income tax cuts and a potential cut in the corporate tax rate for SMEs. According to EY India, capital investments in green infrastructure are expected to see a significant rise, while growth in the retail segment is also anticipated due to lower personal taxes.
Additionally, market sentiment continues to follow the broader trend, with the Nifty Index posting negative returns ahead of the upcoming Budget. This has been attributed to pre-budget investor uncertainty and profit booking. The FII selling continuing and high commodity prices also weigh on investors ahead of the Budget.
Budget 2026: Markets brace for policy signals amid global risks
JM Financial expects the Budget to focus on balancing fiscal prudence, as uncertainties over Trump tariffs and the US-India trade deal continue to pose economic hurdles. Expectations include increased budgetary allocations towards defence and railways, with the fiscal deficit projected at 4.4% of GDP.
However, JM Financial Services says that chances of Budget-day volatility remains high, as potential sell-offs could raise bond yields and tighten liquidity. Geopolitical tensions, currency fluctuations, and FII outflows remain major concerns.
India-EU FTA optimism lifts sentiment across key sectors
Meanwhile, optimism over the India-EU FTA is helping uplift market sentiment, as the agreement aims to remove tariffs on over 90% of traded goods. This could benefit sectors such as garments, pharmaceuticals, engineering goods, and IT services.
Here is what more to expect from the Union Budget 2026.
Budget Expectations 2026 LIVE Updates: EcoGuard recommends well structured domestic carbon pricing to help soften CBAM exposure
As EU's Carbon Border Adjustment Mechanism comes into force carbon intensity will become an important parameter for trade, Yashodhan Ramteke, CEO, EcoGuard Global recommends for a a well structured domestic carbon pricing and measurement ecosystem which cab soften CBAM exposure and help Indian industry compete in carbon-constrained markets.
" Policymakers should focus on alignment. India’s carbon market architecture must meet global standards for verification and traceability so that decarbonisation becomes a trade advantage instead of a trade barrier.” Ramteke added.
Budget Expectations 2026 LIVE Updates: Mistsubishi India sees policy support for energy efficient technologies
Industry experts says that domestic manufacturing is expected to see a boost and focus would also be diverted towards sustaining green mobility.
Gurvinder Gandhi, CFO, Mitsubishi Electric India expects that policy push would be seen towards prioritising technologies that address air quality and energy efficiency across industries.
"The incentivisation of more advanced and energy-efficient technologies in air purification can provide quantifiable benefits in terms of cutting down the losses associated with pollution, enhancing the urban living conditions and supporting the overall climate commitments of India.” Gandhi added.
Budget Expectations 2026 LIVE Updates: Education Budget 2026: 6% of GDP in focus
As India prepares for the Union Budget 2026-27, the education sector is pushing for a stronger fiscal push, aiming to reach the NEP 2020 target of 6% of GDP. The Confederation of Indian Industry (CII) has proposed a phased pathway starting with 4.6% in FY27, alongside outcome-linked funding in select states tied to learning outcomes and enrolment growth.
Industry experts stress that India’s next phase of growth hinges less on infrastructure and more on building industry-ready talent. Regulatory reform, AI integration, and vocational skilling are central to this budget wishlist.
Budget Expectations 2026 LIVE Updates: Tax revenues expected to recover in FY27
After a weak FY26, tax collections are expected to improve in FY27 on the back of better nominal GDP growth. Elara projects net tax revenue growth of 8.1% in FY27, compared with 5.7% in FY26.
Higher excise duties on cigarettes and tobacco products are expected to support revenue, while any hike in petrol and diesel excise could provide additional upside. Corporate and direct tax collections are also likely to recover as economic activity picks up.
Budget Expectations 2026 LIVE Updates: Defence stocks reloaded: Visibility improves as orders outpace execution
India’s defence sector is entering 2026 with rare revenue visibility. A Rs 1.8 lakh crore Budget 2025 outlay, over 50% utilisation in H1FY26, and nearly Rs 9 lakh crore worth of Acceptances of Necessity approved in the past three years have created a deep order funnel.
Defence PSUs alone are sitting on an estimated Rs 10 lakh crore pipeline. With spending likely to rise 10–15% in Budget 2026, taking the allocation closer to Rs 2 lakh crore, defence is no longer discretionary.
Read more: BEL, HAL, and Solar industries: Decoding the ₹10 lakh crore order pipeline ahead of budget 2026
Elara Capital expects Government to move from a capex spender to a capex enabler, focusing more on policy reforms and private investment facilitation rather than aggressive public infrastructure spending. It noted that Capital expenditure in FY26 is likely to fall short of Budget estimates by around Rs 400 billion, mainly due to limited utilisation and the absence of new capex schemes during the year.
Customs duty rationalisation is expected to be a major reform agenda in the FY27 Budget. Elara noted that India’s current customs structure remains complex, with eight duty slabs, multiple exemptions and frequent classification disputes.
Budget Expectations 2026 LIVE Updates: Three defence bets, Three different bottlenecks
Bharat Electronics, Hindustan Aeronautics and Solar Industries are positioned at different points of India’s defence build-out. BEL’s Rs 75,600 crore order book and Rs 1 lakh crore pipeline underpin three years of visibility, with QRSAM as a key catalyst.
HAL’s Rs 2.3 lakh crore backlog offers scale, but GE engine delays cap near-term execution. Solar, meanwhile, is pivoting sharply into defence, targeting 50% revenue contribution by FY28, aided by global ammunition shortages.
Read more: BEL, HAL, and Solar industries: Decoding the ₹10 lakh crore order pipeline ahead of budget 2026
Budget Expectations 2026 LIVE Updates: Industry tempers expectations, bets on reform over wish lists
The emphasis is on positioning India as a credible global investment destination through decriminalisation, deregulation, fiscal discipline and a renewed privatisation push.
Industry voices are calling for deeper regulatory reform, faster capital formation, and policy signals that can lift the investment rate by at least 2% and manufacturing’s GDP share towards 25%. There is also cautious optimism around AI, biotech and research funding, even as past mega-scheme announcements await execution.
Read more: Expect ‘Jan Vishwas 3.0’, mega multi-year schemes & hope privatisation-backed fiscal probity
Budget Expectations 2026 LIVE Updates: Saurabh Mukherjea’s five Budget wishlist
Saurabh Mukherjea, founder and CIO of Marcellus Investment Managers, has outlined a five-point “wishlist” ahead of Budget 2026, emphasising that while he is sceptical about how many proposals will materialise, key areas that could shape policy include:
1. The government staying the course on fiscal consolidation
2. A cut in income tax
3. Cuts in capital expenditure (capex)
4. A reduction in corporate tax rates for SMEs
5. Policy measures to roll back red tape for SMEs to be implemented as soon as possible
Read more: Saurabh Mukherjea’s 5-point Budget wishlist: Is your portfolio ready for the ‘red tape’ reset?
Paint manufacturers are watching the Budget closely for signals on housing, infrastructure and input costs. “Sustained government support for housing, infrastructure and manufacturing continues to shape the growth trajectory of the paints industry,” Kuldip Raina, managing director and chief executive of Shalimar Paints, said.
He said increased capital expenditure on roads, railways and airports would directly boost demand for industrial and protective coatings.
Raina also called for rationalised customs duties on raw materials such as titanium dioxide, resins and pigments. “This will reduce input costs and improve value for money for end-users,” he said, adding that tax relief for households could shorten repainting cycles and drive premiumisation.
Budget Expectations 2026 LIVE Updates: Dental leaders urge Government to fix the Oral Cancer ‘Blind Spot’
While cancer care has emerged as a policy priority, dental-care providers say oral health remains a blind spot in public-health planning. “Oral cancer is the most common cancer among Indian men, with India accounting for nearly one-third of global oral cancer cases,” Vimal Arora, chief clinical officer at Clove Dental, said. He called for Budget 2026 to recognise oral health as a standalone public-health category, with dedicated funding for screening and early intervention.
“Strengthening oral healthcare is not an add-on to cancer policy; it is essential to making cancer care more effective, equitable and sustainable,” Arora said.
Budget Expectations 2026 LIVE Updates: Higher PSU capital spending seen as key growth lever
Nuvama expects a renewed push for higher capital expenditure by public sector undertakings in Budget 2026. Nuvama highlighted that as PSU capex as a share of GDP had declined sharply from pre-Covid levels, the government may nudge these entities to play a larger role in driving investment-led recovery.
AI, technology and defence are also expected to remain key focus areas, reflecting the changing global order and the government’s emphasis on self-reliance. Policy measures and incentives to encourage investments in these sectors could be announced.
The Budget is also likely to continue its deregulation push, with efforts to simplify customs duties, ease compliance burdens and streamline tax filings to improve the ease of doing business.
Budget Expectations 2026 LIVE Updates: Nuvama sees higher capex but warns growth push may fall short
Nuvama noted that the economy is bottoming out, but growth impulses are still weak. It expects spending cuts to meet the FY26 gross fiscal deficit target of 4.4% of GDP could further limit the recovery.
"While fiscal expansion is unlikely, we forecast the FM would refrain from further consolidation in FY27. Gross tax revenue (GTR) may increase 8% in FY27, enabling capex and development spending to grow in low/mid-teens versus single-digit in FY26." However, Nuvama said a stronger growth push would require either large disinvestments or a sharper increase in PSU-led capex, which has remained weak for years.
Beyond fiscal arithmetic, the finance minister is also expected to announce deregulation measures and credit guarantee schemes to support growth.
For the markets, Nuvama said acceleration in development spending/capex is welcome, but may be insufficient to stall the earnings downgrade cycle because margins are poised for mean reversion and external headwinds still loom large.
"Hence, unless there is a larger growth impulse, defensive bias is warranted. Tweaks on capital gains taxes could sway sentiments in the near term," Nuvama noted.
Budget Expectations 2026 LIVE Updates: FICCI seeks export push, simpler customs tariffs in Budget 2026
Amid growing concerns over the India–US trade deal and uncertainty surrounding global tariff regimes, industry body FICCI has called for a comprehensive support package in the Union Budget 2026.
The chamber said the export sector is also hoping for long-pending reforms to the Special Economic Zones (SEZ) policy, along with further rationalisation of customs duties in the upcoming budget.
FICCI suggested that customs tariffs could be simplified by converging existing rate slabs into three uniform levels, a move it said would streamline the system and significantly reduce compliance costs for businesses.
Budget Expectations 2026 LIVE Updates: Manufacturing sector expectations
The upcoming Union Budget is a critical turning point for India's manufacturing sector, offering a prime opportunity to implement reforms that could transform the nation into a global industrial leader. According to Vinod Kumar, Partner and Leader of Manufacturing at PwC India, the government should focus on a pragmatic mix of labor regulation updates, infrastructure improvements, and enhanced access to financing. Furthermore, by prioritizing R&D, core technology adoption, and specialized skill development in AI and automation, India can significantly boost industrial productivity. These strategic moves are essential for fostering sustainable economic growth and realizing India's ambition to become a premier manufacturing hub on the world stage.
Budget Expectations 2026 LIVE Updates: Budget likely to lift retail demand, ease GST pain
According to Paresh Parekh of EY India, the forthcoming Union Budget is expected to provide a boost to the retail and consumer products sector through measures that strengthen manufacturing, support MSMEs, and promote digital payments. He noted that any reduction in personal income taxes could raise disposable incomes and spur consumer spending, thereby driving retail growth. On the GST front, Parekh said addressing concerns such as the inverted duty structure could offer relief to FMCG and consumer durables companies while also encouraging fresh investments in the sector.
“We hope the Union Budget 2026 builds on the initiatives taken in 2025 and earlier years to further encourage new employment generation, particularly in manpower-intensive sectors such as manufacturing, BFSI, global capability centres, retail, e-commerce and logistics, as well as emerging industries like electric vehicles and renewable energy,” said Sonal Arora, Country Manager, GI Group Holding.
She added that the pace of incremental job creation in India will depend heavily on bridging the persistent gap between hiring intent, industry requirements and available skills. “This shows the need for a stronger policy push on skilling and employability, with closer alignment to industry needs, alongside continued improvements in ease of doing business and regulatory simplification,” Arora said.
Highlighting the need to boost women’s workforce participation, Arora noted that despite recent progress, only about one-third of working-age women are currently part of the labour force. “Budget 2026 should consider targeted incentives for companies that hire and retain women, supported by flexible work models, childcare infrastructure and focused skilling programs for women across sectors. This represents one of the fastest pathways to inclusive growth and large-scale job creation,” she said.
Budget Expectations 2026 LIVE Updates: Bluedart sees policy support for cleaner mobility
Industry experts have added that the upcoming budget will see policy push towards cleaner mobility.
"Rationalising taxation on green transport technologies, expanding EV charging ecosystems and accelerating pathways for Sustainable Aviation Fuel (SAF) will help future-proof logistics networks while supporting national climate goals," Dipanjan Banerjee, Chief Commercial Officer, Blue Dart said.
He added that supportive policy measures which simplify cross-border e-commerce for MSMEs can help unlock B2C export potential from Tier 2 and Tier 3 markets.
Budget Expectations 2026 LIVE Updates: Muthoot FinCorp calls for expanding credit access norms
Market experts have said that the upcoming Budget 2026 could play a crucial role in expanding credit access for rural and lower-income households.
“We recommend budgetary measures for more credit supply to the rural and lower middle-income segments,” Shaji Varghese, chief executive officer of Muthoot FinCorp, said.
He recommends on liberalising branch-opening norms for
gold loan NBFCs and rationalising capital risk weights to lower the cost of lending.
Varghese also urged the government to harmonise SARFAESI Act applicability for NBFCs with banks and housing finance companies, and to design schemes that bring one-time defaulters back into the formal credit system.
Read More: From gyms to gold loans: What consumers and companies want from Budget 2026
Budget Expectations 2026 LIVE Updates: Lemonn Markets expects higher preference for the defence sector
Experts have said that the forthcoming budget will see higher budgetary allocation towards the defence sector.
"Instead of aggressive public spending, this year's budget will likely rely on a recovery in consumption and private investment to drive growth, while keeping overall capex growth moderate. Defence, green energy, urban infrastructure, and manufacturing will see clear preference, while health, education, and traditional infrastructure get only incremental increases," Gaurav Garg, Research Analyst at Lemonn Markets Desk said.
He added that the Union Budget 2026 will focus on disciplined spending, targeted capital allocation, and private-sector crowding.
Budget Expectations 2026 LIVE Updates: FICCI expects support for export industry
With the increasing concerns over India-US trade deal and uncertainties over global tariffs, FICCI expects a comprehensive support package in the Union Budget 2026.
Further, the export industry is also expected to see reforms to SEZ policy and a further rationalisation of custom tariffs in the budget.
The commerce chamber says that that custom tariffs could be rationalised by the convergence of rate slabs to three levels. They added that this would help simplify the system and lower compliance costs.
Budget Expectations 2026 LIVE Updates: PLI seen as key to 100 GW capacity target by 2047
Officials said a manufacturing-focused PLI scheme is critical for achieving India’s target of 100 GW nuclear power capacity by 2047. The incentive is expected to reduce dependence on imports, shorten project timelines and support fleet-mode expansion, including Small Modular Reactors (SMRs).
Industry participants believe long-term demand visibility will unlock private investment in nuclear-grade manufacturing. If implemented alongside the SHANTI Act, the PLI could shift India from being a buyer of nuclear equipment to a global manufacturing hub, strengthening energy security and decarbonisation efforts.
Read More: Centre may roll out Rs 20,000 cr PLI scheme for nuclear components
Budget Expectations 2026 LIVE Updates: Push for homeopathy in healthcare says Dr.Batra
Talking on the healthcare sector, Dr. Mukesh Batra, Founder- Chairman of Dr Batra's Healthcare recommends for policy push towards preventive and alternative systems of medicine, including AYUSH.
"Focused investment in research and development, particularly in homeopathy and other AYUSH disciplines, will enhance credibility, foster wider acceptance among medical professionals, and increase public trust," Dr. Batra said.
"We also expect the forthcoming Budget to strengthen insurance coverage and wellness provisions to include long-term preventive care, while accelerating investments in digital health infrastructure and community-based clinics," he added.
Budget Expectations 2026 LIVE Updates: Govt mulls Rs 18,000–20,000 crore PLI for nuclear manufacturing
The government is considering a dedicated Production Linked Incentive (PLI) scheme for manufacturing critical nuclear components in the upcoming Union Budget, with an outlay of Rs 18,000–20,000 crore, according to officials.
The proposed scheme aims to strengthen India’s domestic nuclear supply chain, focusing on heavy forgings, reactor pressure vessels and specialised nuclear-grade alloys. Officials said existing domestic capacities are inadequate for large-scale nuclear expansion.
Read More: Centre may roll out Rs 20,000 cr PLI scheme for nuclear components
Budget Expectations 2026 LIVE Updates: EY India expects budget 2026 to boost manufacturing and lower personal taxes
According to Paresh Parekh of EY India the forthcoming budget is expected to support the retail and consumer products sector by boosting manufacturing, helping MSMEs, and promoting digital payments.
He further expects that lower personal taxes are likely to increase disposable incomes and strengthen consumer spending thereby driving retail growth. On GST front, he expects that addressal of issues like the inverted tax structure may provide relief to FMCG and consumer durables companies and also encourage new investments.
Finance Minister Nirmala Sitharaman is set to present the Union Budget 2026-27 on Sunday, February 1, 2026, at 11 am.
The Budget session will start on January 28, and will continue till April 2. The Economic Survey 2026, will be presented on January 29. The Survey is one of the most important annual documents released by the central government, as it summarises the state of economy and provides insights on major macroeconomic trends.
This further helps in shaping discussions on what to expect from the financial document.
Read more: Budget 2026| Economic Survey 2026 date, time and schedule: Check when and how to watch live