This Sunday, the finance minister will present the Union Budget for fiscal year 2026–27, marking her ninth consecutive term as India’s first woman finance minister to do so.
While former Prime Minister Morarji Desai presented the Budget 10 times and P. Chidambaram nine times, neither managed the feat in consecutive years.
Think of the Union Budget as the government’s annual money manual.
On Budget Day, the action unfolds live from Sansad Bhawan, with the finance minister’s speech typically running from 11 am to around 1 pm.
Catch our complete Budget 2026 coverage here
A Budget built for continuity
This year’s Budget comes at a pivotal moment.
It sits between last year’s expansionary Budget and the rollout of the new Income Tax Act, 2025. That makes this year’s exercise less about big-bang announcements and more about acting as a bridge.
On the personal taxation front, expectations are tempered.
After last year’s rejig of the concessional tax regime — effectively eliminating tax liability for individuals earning up to Rs 12 lakh — experts do not expect major slab or rate changes.
Instead, the focus is likely to be on smoother implementation of the new tax law, faster refunds, simplified compliance, and fixing administrative bottlenecks that still frustrate taxpayers.
Beyond individual taxpayers, businesses are looking for greater certainty and fewer friction points.
Calls are growing to rationalise TDS (Tax Deducted at Source) rates, simplify compliance for GST-linked B2B payments, and address anomalies in share buyback taxation and notional valuation rules that often drag genuine transactions into disputes.
Also Read| Budget for power shift: Key numbers to be watched
What moment is India in?
The macroeconomic backdrop remains supportive — but fragile.
India heads into Budget 2026 with growth holding firm, but little room for missteps. The Economic Survey projects real GDP growth of 6.8–7.2% in 2026–27, a step down from 7.4% in the current year, but still among the fastest globally.
The fiscal stance remains calibrated: the FY25 deficit came in at 4.8% of GDP, with a 4.4% target for FY26, even as public investment continues to anchor growth.
Capital expenditure stands at ₹11.21 lakh crore in FY26 (BE), with effective capex at ₹15.48 lakh crore, reinforcing infrastructure-led growth.
Inflation has eased, averaging 1.7% between April and December 2025, offering policy headroom. External pressures persist as exports face global trade frictions, keeping the focus on domestic demand and public capex.
Domestic demand remains resilient, but global headwinds are intensifying.
With exports under pressure from rising US tariffs and private investment still cautious, economists expect the government to continue leaning on public spending — even as it stays committed to fiscal consolidation.
Capital expenditure, particularly on roads, ports, energy and defence, is expected to rise, while the fiscal deficit target is nudged lower.
Also Read| Why Budget 2026 might be less about announcements and more about being fiscally prudent
Trade tensions return to centre stage
This Budget lands at a geopolitically loud moment for India — one still echoing with last year’s Trump-induced turbulence.
Under Trump, reciprocal US tariffs on Indian exports climbed as high as 50%, briefly placing India among the world’s most heavily taxed exporters.
Against this backdrop, New Delhi is sharpening its own trade toolkit.
Last year, Centre rolled out a series of Goods and Services Tax (GST) reforms aimed at shoring up domestic consumption and cushioning exporters through targeted incentives — underscoring how quickly trade shocks can spill over into domestic policy.
Now, policymakers are weighing higher customs duties and targeted incentives for goods where import dependence remains high despite domestic manufacturing capacity, reported ET.
Industry, too, is being nudged to rethink supply chains and move away from single-source dependence, according to people familiar with the deliberations.
On trade, CII has argued for a simplified three-tier tariff structure to sharpen competitiveness, plug India more tightly into global value chains and encourage export diversification.
The objective is to de-risk supply chains, narrow the trade gap and reduce dependence on single geographies.
Also Read| The great game of gold is at play. Will Sitharaman play her hand?
MSMEs likely at the forefront
As the Budget spotlight swings toward MSMEs, the message from industry is clear: incremental tweaks won’t cut it anymore. India’s small businesses are grappling with structural constraints that credit alone cannot fix — and they want the government to think bigger, faster and longer-term.
Those concerns formed the backdrop to pre-Budget discussions with the Finance Minister, where MSME representatives pushed for an expanded technology upgradation fund across sectors, easier access to credit, and targeted support to help smaller firms break into export markets.
Industry bodies have gone further. The PHD Chamber of Commerce and Industry, in its submissions to the Finance Ministry, proposed a wide-ranging package covering income tax changes, bank lending, export support and equity funding.
Technology upgrades featured prominently as well. PHDCCI sought the return of capital subsidies for technology upgradation, with the investment ceiling raised to Rs 2 crore from the earlier Rs 1 crore, particularly to help MSMEs adopt green and environmentally friendly technologies.
Big business weighs in too
Large industry is broadly upbeat — but not complacent.
The Confederation of Indian Industry (CII) has urged the government to use the Union Budget 2026–27 to lock in India’s position as the world’s fastest-growing major economy, backing its pitch with a sweeping reform agenda across infrastructure, innovation, digital systems and the financial sector.
CII’s optimism rests on hard numbers. Its Business Confidence Index climbed to 66.5 in Q3FY26 — the highest in five quarters — fuelled by stronger domestic demand, improving profitability and better investment conditions.
Two-thirds of firms reported higher demand in Q2FY26, and 72% expect growth to accelerate further in Q3FY26, helped by GST rate cuts and festive consumption.
At the heart of CII’s recommendations is the case for sustained public investment.
The industry body has pitched a revitalised ₹150-lakh-crore National Infrastructure Pipeline 2.0, focused on shovel-ready, revenue-generating projects, faster dispute resolution and quicker execution — all aimed at crowding in private capital rather than crowding it out.
Emerging themes
Beyond trade and MSMEs, several themes are gaining momentum ahead of Budget Day — with innovation, technology and execution rising to the top of industry’s agenda.
CII wants the Budget to lean decisively into innovation. Its proposals include setting up 10 Centres of Advanced Learning and Research in frontier areas such as artificial intelligence, robotics, clean energy and biotechnology, funded through a matched public-private model.
To support this ecosystem, the industry body has also suggested creating an India Talent Agency to attract global experts and diaspora researchers and deepen the country’s knowledge base.
Digital governance is another priority. CII has recommended a ₹1,000-crore Digitisation Fund aimed at simplifying compliance through paperless, presence-less systems, enabling real-time data flows and further improving ease of doing business.
Financial sector reform rounds out CII’s agenda.
Its proposals range from strengthening Development Financial Institutions and enabling selective NBFC-to-bank transitions to allowing calibrated foreign equity, encouraging new well-capitalised banks and consolidating weaker ones.
CII has also called for accelerating asset tokenisation across real estate, infrastructure and financial assets — building on RBI and IFSCA pilots — and expanding regulatory sandboxes in GIFT City.
Technology — especially artificial intelligence — is emerging more broadly as a defining pillar of Budget expectations. Industry wants the government to move from signalling intent to enabling execution by treating AI as core digital infrastructure.
Key demands include cheaper and cleaner power for data centres, faster approvals, clarity on data governance, access to affordable compute, and targeted funding for sovereign AI models and Indian-language datasets.
Telecom operators, meanwhile, are pushing for relief on regulatory levies and a rationalised GST treatment of licence and spectrum payments, arguing that telecom has become a horizontal enabler of the entire digital economy.
Manufacturing, agriculture and job creation are also firmly back in focus. From industrial corridors and export-oriented clusters to agri-processing, cold chains and logistics, industry is looking for Budget 2026 to back scale, skilling and competitiveness — particularly in labour-intensive sectors.
With India needing to create millions of jobs annually to harness its demographic dividend, expectations are building around targeted skilling programmes, MSME support and policies that encourage formal, sustainable employment growth.
Taken together, the signals point to a Budget that prioritises calibration over spectacle.