Budget 2026

Medical inflation higher than economy-wide inflation. Expectations: Reduced customs on medicines & medical equipment, hospital expansion in Tier 1-2 cities under PLI 2.0, telemedicine funding, preventive health screening programs. Industry demands: Recognize cosmeceuticals as healthcare-adjacent, GST rationalization. Focus: Capacity + Domestic manufacturing + Tech-led delivery.

Tech sector: $300 Bn in FY26, 7%+ of GDP. Deloitte expects: National Digital Infrastructure Mission 2030, Public Digital Infrastructure Fund, National Data & AI Commons. Focus: Semiconductor PLI execution, compute capacity, R&D incentives, cyber defence. India to shift from "service provider to innovation exporter." Digital economy to reach 1/5th of GDP by 2030.

Challenges: Transmission constraints, DISCOM financial health, rising capital costs. Expectations: Inter-state transmission & green energy corridors, PLI for BESS components, PM-Suryaghar-like scheme for MSMEs (NITI Aayog proposes ₹28,672 Cr). Green hydrogen momentum continues. EU CBAM effective 2026 - decarbonization urgent. 27-36 MT emission reduction potential.

5.93 Cr MSMEs employ 25 Cr+ people, contribute 45.73% of exports. Budget 2025 raised credit guarantee to ₹10-20 Cr. Expectations: Faster GST/RoDTEP refunds, payment timeline enforcement, 100% rooftop solar depreciation, income tax cut to 25% for non-corporate MSMEs. ASSOCHAM demands tariff protection for textiles, gems, seafood hit by Trump tariffs.

Capital expenditure at 3.1% of GDP. Focus: National highways (₹2.87L Cr), station redevelopment, urban infra, affordable housing. Second Asset Monetisation Plan 2025-30. Maritime Development Fund: ₹25,000 Cr. Modified UDAN scheme for 120 new destinations. CII demands 12% capex increase & new NIP 2026-32. PPP models for large projects.

FY26: ₹2.52L Cr → FY27: ~₹2.75L Cr (10% jump expected). Focus: 200 Vande Bharat, 50 Namo Bharat, 100 Amrit Bharat trains. Kavach 4.0 safety system, 99%+ electrification, dedicated freight corridors. PPP investment of ₹2.64L Cr. Safety investment: ₹1.16L Cr. Vande Sleeper launched Jan 2026. Stocks: IRFC, RVNL, RailTel.

Largest expenditure sector: ₹6.81L Cr in FY26 → expected increase in FY27. Following ₹8.1L Cr DAC approvals (2024-25). Focus: Make in India defence, AI-led intelligence systems, counter-drone tech, cyber defence platforms, R&D funding. Multi-year capital allocations for scaled deployment expected. Stocks: BEL, HAL, Bharat Forge.

Experts say no major LTCG/STCG changes expected. STT revenue at ₹78,000 Cr - rollback unlikely. Demand: Raise LTCG exemption from ₹1.25L to ₹2L. Jio BlackRock CIO calls Budget "non-event for markets." Sensex target: 90,000 by Dec 2026 if supportive Budget. NSE & BSE open on Feb 1 for live trading. Watch: L&T, BEL, REC, PFC.

Budget 2025 made income up to ₹12.75L (with SD) tax-free under new regime. For Budget 2026: Major changes unlikely, but demands include raising 30% slab to ₹30L+, standard deduction to ₹1L, Section 80C to ₹3L. New Income Tax Act 2025 effective from April 1, 2026. Only 20% taxpayers now in old regime.

BMI (Fitch Solutions) expects 4.3% fiscal deficit target, though actual may reach 4.6%. India's economy forecast to grow 7-7.5%. Total expenditure ~₹50.65L Cr (7.4% higher than FY26 RE). Focus: Prudence over Populism. Capital spending to continue with ₹11.21L Cr+ allocation. J.P. Morgan sees rally from H2 2026 onward.

Union Budget 2026-27 will be presented on Sunday, February 1, 2026 at 11 AM - first-ever Sunday Budget in India's history. FM Nirmala Sitharaman breaks records of Manmohan Singh, Arun Jaitley & P. Chidambaram. Economic Survey on Jan 29. Budget Session: Jan 28 - Apr 2. Watch live on Sansad TV & indiabudget.gov.in