Union Budget 2026: Key Expectations and Insights

As the Union Budget 2026 approaches, set to be announced on February 1, there is rising anticipation across various industries and financial sectors. In this article, we explore the key expectations and insights that could shape the upcoming budget, including tax reforms, sector-specific allocations, and measures aimed at boosting economic growth.

Key Expectations from the Union Budget 2026

In the lead-up to the budget announcement, industry experts and stakeholders are voicing several key expectations:

  • Policy Support and GST Rationalisation: Industry bodies are advocating for policy support and rationalisation of the Goods and Services Tax (GST) to enhance the ease of doing business.
  • Income Tax Slabs: While experts believe significant changes to income tax slabs may be unlikely, there are calls for a smoother transition to the new Income Tax Act effective from April 1, 2026.
  • Pressure on the Middle Class: With the previous budget making income up to ₹12 lakh tax-free, there are suggestions to increase the standard deduction to ₹1,00,000 and raise the threshold for the 30% tax slab.
  • Support for Exports: As the rupee faces challenges, experts anticipate measures to boost export-import substitutions, including initiatives to attract Foreign Portfolio Investment (FPI) flows.
  • Transaction Taxes and Capital Gains: Investment firms are eager for clarification on transaction taxes and simpler capital gains tax structures.
  • Dispute Resolution Schemes: A one-time dispute resolution initiative could unlock over ₹1.5 lakh crore stuck in litigation, providing businesses with an opportunity to resolve legacy disputes.
  • Healthcare Provisions: A push for higher allocations in healthcare, particularly for maternal and child health, is expected.

Sectoral Expectations: What Different Industries Seek

Electronics Sector

The electronics industry is looking for GST removal and coordinated efforts to promote domestic manufacturing amidst ongoing supply chain challenges.

Renewable Energy

Anticipated focus on high-tech automation and increased budgetary allocations for renewable energy initiatives is expected to transform the sector.

Non-Banking Finance Companies (NBFCs)

The NBFC sector is banking on timely government support for infrastructure projects and improved operational efficiency.

Securities Transaction Tax (STT)

Market participants seek a re-evaluation of STT to reduce trading costs and allow it as a deductible expense for delivery-based trades.

Export Sector

Expectations include measures to enhance the Government’s ₹25,060 crore Export Promotion Mission to support small exporters and labour-intensive sectors.

Electric Vehicles (EVs)

There is a demand for more targeted EV subsidies in the upcoming budget, alongside GST rationalisation for EV components.

Agriculture

The agriculture sector anticipates a production cluster-based approach to enhance FPO support and working capital access.

Housing and Infrastructure

Projections highlight a robust focus on affordable housing and sustainable building practices, aiming to deepen market participation for investors.

Conclusion

As the February 1 announcement date approaches, all sectors are eagerly awaiting clarity on how the Union Budget 2026 will shape their prospects. With numerous expectations on tax reforms, sectoral investments, and economic measures, the focus will undoubtedly be on fostering growth and sustainability across a range of industries.

Stay tuned as we continue to follow the developments leading up to this significant budget announcement!