Budget 2026 Expectations Highlights: What's in store for MSMEs, AI, defence? More relief for taxpayers this year?

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Union Budget 2026 News LIVE: Mukul Kaushik, Chief Revenue Officer at Trackier, said that the Budget 2026-27 is expected to encourage digital transformation and technology adoption for MSMEs, with incentives for AI, cloud services, cybersecurity and SaaS tools.

“As the economy becomes increasingly data-driven, we’re looking for Budget 2026 to encourage digital transformation and technology adoption for MSMEs, with incentives for AI, cloud services, cybersecurity and SaaS tools,” said the expert.

“Support for digital infrastructure and skills training will help smaller tech players like us improve operational efficiency and competitiveness. Clear policies that bridge innovation with everyday business realities can unlock significant value across India’s startup landscape,” said Kaushik.

Union Budget 2026 News LIVE: Madhumita Agrawal, Founder & CEO of Oben Electric, said that the government in the upcoming Union Budget 2026 should introduce targeted EV subsidies and demand incentives specifically for electric motorcycles.

“To achieve our national 2030 targets, the budget should introduce targeted subsidies and demand incentives specifically for electric motorcycles. Prioritising this dominant segment will unlock the next level of mass-market electrification and move India closer to a truly self-reliant EV ecosystem,” said the expert.

Agrawal also said that Oben Electric views the Union Budget 2026-27 as a vital opportunity to strengthen India’s electric mobility journey.

“Aligning the GST on all EV components to a uniform 5% is essential to support domestic manufacturing and make ‘Make-in-India’ EVs more affordable for the mass market. Furthermore, we believe the next wave of adoption will be led by electric motorcycles. While scooters have seen early success, motorcycles dominate with nearly 70% of India’s two-wheeler landscape, but remain significantly under-electrified,” said the expert.

“As the government strengthens its push towards AI integration in education, we hope to see policies that further encourage Corporate India to invest meaningfully in employee reskilling, alongside tax incentives for individuals investing in professional upskilling programmes, similar to educational loans, which would democratise access to high-quality learning and foster a culture of lifelong education,” said Abhimanyu Saxena, Co-Founder of Scaler.

“As the government strengthens its push towards AI integration in education, we hope to see policies that further encourage Corporate India to invest meaningfully in employee reskilling, alongside tax incentives for individuals investing in professional upskilling programmes, similar to educational loans, which would democratise access to high-quality learning and foster a culture of lifelong education,” said Abhimanyu Saxena, Co-Founder of Scaler.

28 January: The Budget Session will start at the Parliament with a joint address by President Droupadi Murmu to both the Houses.

29 January: As per the provisional calendar issued by the Lok Sabha Secretariat, the House will also meet on this day.

31 January: Sitharaman is scheduled to present the Economic Survey on this day.

1 February: Nirmala Sitharaman will present the Budget 2026 at 11 am at the Lok Sabha.

13 February: The first half of the Budget Session ends.

9 March: The second half of the Budget Session will begin on this day.

2 April: The final day of the Budget Session, after which Lok Sabha and Rajya Sabha will be adjourned sine die.

Rajan Bharti Mittal, Vice Chairman of Bharti Enterprises, told ANI, "...I am sure that this year's Budget will also carry more reforms, it will carry more opening of the sectors. We believe that India is on the right track..."

Rajan Bharti Mittal, Vice Chairman of Bharti Enterprises, told ANI, "...I am sure that this year's Budget will also carry more reforms, it will carry more opening of the sectors. We believe that India is on the right track..."

"On the manufacturing front, extending Production-Linked Incentive schemes across the entire solar value chain and key grid equipment will reduce import dependence and strengthen India’s energy security. Optimising flagship schemes such as PM Surya Ghar Muft Bijli Yojana and PM-KUSUM, along with new green finance instruments like sovereign green bonds and climate-focused funds, can further accelerate adoption while attracting long-term capital, said Devansh Jain, Executive Director, INOXGFL Group.

“Founders and investors are looking beyond tax incentives to more practical enablers, easier access to capital and credit, GST rationalisation to ease cost pressures, clearer tax treatment for early-stage investors and ESOPs, and simpler, more predictable compliance frameworks,” said Jeet Mukesh Chandan, Group Managing Director of BizDateUp.

“With the defence budget crossing ₹6.8 lakh crore in the previous FY25–26, the industry is encouraged by the sustained focus on indigenisation and capital allocation. Going forward, there is an expectation that greater emphasis on outcomes, such as faster conversion of DAC approvals into firm orders, enhanced support for indigenous MRO infrastructure, and stronger investment in testing and certification facilities, will further strengthen operational readiness,” said Vice Admiral Paras Nath (Retd.), AVSM, VSM, Group President, Crown Defence.

“From Budget 2026, we are looking for a stronger infrastructure push, especially freight corridors, port connectivity, dry ports and faster rollout of Multi-Modal Logistics Parks under PM Gati Shakti,” said Aneel Gambhir, Chief Financial Officer (CFO), DTDC Express.

“We also expect GST rationalisation for logistics and warehousing, along with smoother digital compliance and documentation systems,” he added.

“Increased investment in maternal and child healthcare, vaccination programmes, and neonatal care is essential to reduce preventable complications. We also urge greater focus on women’s health issues, such as cervical and ovarian cancer, through wider access to screening, HPV vaccination, Pap smear testing, and public awareness initiatives,” said Dr Krishna Prasad Vunnam, Founder and Managing Director, Ankura Hospital for Women & Children.

“Healthcare must remain a top national priority in the upcoming Union Budget. Diseases such as heart attacks, strokes, cancer, diabetes, and kidney failure require timely diagnosis and prompt treatment to save lives and reduce long-term complications. Increased budgetary support for strengthening hospital infrastructure, emergency services, and advanced diagnostics will help ensure faster access to quality care for patients across regions,” said Dr G Anil Krishna, Chairman & Managing Director of Medicover Hospitals (India).

“There is a growing industry consensus around the need for policy support that prioritises preventive care, early screening, and technology-enabled solutions. Enhanced public health spending, targeted incentives for medical innovation, and investments in healthcare infrastructure can help address these unmet needs,” according to Sriram Velliyur, Co-founder & CEO, Curapod, a health-tech startup in the medical-device space.

“A Union Budget that emphasises prevention, holistic care, and accessible therapeutic technologies has the potential to meaningfully lower the economic and social burden of chronic conditions and strengthen India’s healthcare ecosystem for future challenges,” Velliyur added.

“The forthcoming Budget may consider measures such as trade safeguards where appropriate, rationalisation of duties on critical steel inputs, and incentives that encourage capacity expansion and value-added manufacturing. Improved access to long-term financing for technology upgrades, compliance requirements, and scale efficiencies could further support sectoral growth,” says Chandragupt Prakash Mangal, Managing Director, Mangalam Worldwide.

“As digital learning becomes integral to school education, the real challenge lies in translating potential into consistent classroom impact. AI can meaningfully strengthen classroom learning, but its impact will depend on how thoughtfully it is embedded within school systems and curricula. Budget measures that support classroom digital infrastructure and enable continuous teacher upskilling are critical. Rationalising GST on essential education inputs would make a meaningful difference, including removing the 18% GST on paper used for textbooks and lowering the tax burden on digital learning tools, infrastructure, and content used by schools. These steps would help ease cost pressures on parents while supporting the wider adoption of multi-modal learning in line with national education priorities,” says Sumeet Mehta, CEO & Co-Founder, LEAD Group.

Atul Parakh, CEO of Bigul, believes that the upcoming Union Budget is a high-risk event. In the run-up to the mega event, Parakh doesn't anticipate any rallies. He rather advises investors to stay on the sidelines and sit on cash on Budget day and deploy money once clarity on the policy changes emerges.

“While existing GST policies, being 0% on wheat, have benefited affordability for low- to middle-income groups, we urge the government to extend the same to packaged atta, which has 5% GST. This will help make essentials even more accessible. Additionally, increased subsidies for farm-based food processing in staple categories would strengthen rural distribution networks and generate meaningful employment. With thoughtful policy support on regulatory simplicity and agricultural partnerships, we can accelerate growth across untapped markets. When we grow, farmers grow, retailers grow, and families gain better access to wholesome staples. That is the shared vision that drives our outlook for the year ahead,” says Manish Mimani, MD and CEO of Ganesh Consumer Products.

“MSME credit typically strengthens when infrastructure momentum and funding stability for lenders improve together, especially in semi-urban and rural clusters. Given the importance of exports for MSMEs to diversify and scale, targeted budgetary support can play a meaningful role in strengthening the sector while maintaining a prudent, customer-centric approach to lending,” says Umesh Revankar, Executive Vice Chairman, Shriram Finance.

“The upcoming budget is expected to provide greater policy stability and long-term growth enablers for the restaurant industry. Measures that support expansion, ease cost pressures, and encourage employment generation in the hospitality sector would be important, along with steps to manage food inflation and rising raw material costs to ensure sustained consumer demand. We also look forward to rationalisation of rates on food and beverages, particularly for dine-in restaurants. Restoration of GST Input Tax Credit (ITC) would be a meaningful reform, helping offset high operating costs and enabling more sustainable and scalable growth for organised restaurant chains. Additionally, recognising the food and beverage industry as a distinct sector with a separate identity and potentially a dedicated ministry, would help address its unique challenges more effectively and support focused policy-making,” says Vikrant Batra, director and co-founder of Batra Bros Food & Beverage Pvt. Ltd.

“As the Union Budget approaches, there is a strong case to reimagine CSR as a catalyst for employability, not just access. Allowing CSR funds to be channelled toward skilling infrastructure in schools and higher education institutions can strengthen workforce readiness at the source. Embedding vocational training, modular learning, and work-linked degree programs within formal education will help ensure that first-time job seekers enter the workforce not just qualified, but truly job-ready and productive,” says Shantanu Rooj, Founder and CEO of TeamLease Edtech.

The healthcare industry believes that Budget 2026 will indicate how the sector is positioned within India’s growth priorities amid large patient volumes, uneven capacity, and high dependence on imported medical equipment. Read more

“As we approach Union Budget 2026, the general insurance sector is at an important inflection point where the focus has shifted from rapid topline expansion to sustainable, disciplined growth. Stronger regulatory oversight, improving claims governance, and rising customer expectations are collectively reshaping the industry into a more transparent and capital-efficient ecosystem. The budget presents an opportunity to deepen insurance penetration by improving affordability and access, particularly in underinsured segments such as small businesses, rural households and first-time buyers. Targeted incentives for micro-insurance and social sector covers, along with relief on policy-level costs for low-premium products, can materially accelerate last-mile adoption,” says Naveen Chandra Jha, MD & CEO of SBI General Insurance.

“The Union Budget 2026 is expected to place strong emphasis on housing and infrastructure as key levers of economic growth, while reinforcing domestic resilience amid global uncertainties. For the real estate sector, measures aimed towards rationalisation of affordable housing criteria, infrastructure-led equitable development, and incentivisation of sustainable building practices are high on the priority list. With end-user demand across office, residential, industrial & warehousing, retail and hospitality segments at historical peaks or close to peak levels, the upcoming Budget has the potential to further strengthen investor confidence, deepen market participation and support long-term growth,” says Badal Yagnik, Chief Executive Officer & Managing Director, Colliers India.

“The Union Budget 2025–26 provided an important push through continued support for EV adoption, battery manufacturing, and localization under Make in India. As we look ahead to Budget 2026–27, we expect a sharper focus on strengthening the entire EV value chain, from raw materials, and cell manufacturing, to charging infrastructure, and recycling. Rationalization of GST on electric vehicles, and components, extension of demand incentives, and easier access to long-term, and low-cost financing will be critical to accelerate adoption at scale,” says Yetender Sharma, Managing Director, Supertech EV.

“India’s agriculture continues to be constrained by fragmented landholdings and weak market linkages. A production cluster approach, supported through institutions like Farmer Producer Organisations (FPOs), offers a viable pathway to overcome these structural challenges. Clusters enable aggregation of produce, collective input procurement, shared infrastructure, and stronger bargaining power in markets. Budget 2026 should deepen support for Farmer Producer Organizations (FPOs), not merely by increasing their numbers, but by strengthening their functionality so that they can serve as effective platforms for professional management, access to working capital, market intelligence, and post-harvest processing infrastructure,” says Saroj Mahapatra, Executive Director, PRADAN.

“While Budget 2025 increased allocations to the renewable sector through higher MNRE funding, initiatives such as PM Surya Ghar and PM-KUSUM, and continued support for green energy corridors and distribution reforms, some gaps remain. Access to long-term, affordable financing for manufacturing and project development is still limited, particularly for emerging players. IIn addition, more stable and predictable policy frameworks around tariffs, incentives and project contracts would help improve investor confidence. Addressing these areas in the next budget would strengthen the foundations of India’s renewable energy growth and support a more reliable transition at scale,” says Vinay Thadani, Director and CEO, GREW Solar.

The forthcoming Budget 2026 presents a chance to enhance long-term resilience via specific initiatives in the agriculture sector, according to experts. Allocations for agriculture has increased consistently from ₹21,933 crore in FY 2013-14 to more than ₹1.27 lakh crore today, as per reports. Read more

“Smart meters are catalysts for India's digital transformation journey towards the $5 trillion economy. Advanced Metering Infrastructure (AMI), therefore, deserves a formal recognition under the Harmonized Master List of Infrastructure. This inclusion will unlock transformative benefits such as long-term, low-cost capital through priority sector lending, infrastructure bonds, InVITs, and global institutional investors, while providing critical regulatory clarity for lenders and developers navigating this evolving landscape,” says Shri Anil Rawal, MD & CEO, IntelliSmart Infrastructure.

“A key expectation from Budget 2026 is policy and investment support for AI-led compliance, verification, and fraud prevention. As transaction volumes continue to rise, fintech infrastructure providers play a critical role in enabling secure onboarding, real-time risk assessment, and regulatory adherence. Encouraging India-first, explainable AI for regulated use cases will strengthen trust and scalability across the ecosystem,” says Anand, Founder & CEO of PaySprint, a fintech venture

Varun Goel, Senior Fund Manager at Mirae Asset Investment Managers (India), expects the government’s focus on infrastructure spending to continue in Budget 2026, with further impetus on roads, railways and green energy. Check his interview with Mint

“With GDP growth looking robust, the real test is improving the quality of growth: jobs, wages, and rural demand - so the benefits are durable and widely shared. The budget must recognize that we live in a very uncertain world and it should insure the economy against uncertainty. The central challenge for Budget 2026 is uncertainty—currency volatility, shifting capital flows, tariff risks, and inflation spillovers. The budget should insure the economy against uncertainty both at the macro level and micro level by building macro-resilience in an uncertain world and reducing the cost of risk for producers and exporters, particularly for MSMEs. The budget should also incentivize channeling of patient capital to long-term projects,” says Dr. Partha Chatterjee, Dean of Academics and Professor of Economics, Shiv Nadar University.

“Organisations operating in the corporate travel/events space are eagerly awaiting a simpler system of GST Input Credits. At present, it often happens that GST payments made to hotels, transportation partners, and various other service providers tend to get withheld for a considerably long period of time due to certain bottlenecks in processes,” says Vinod Kumar Sah, CTO and co-founder at CoTrav.

“From a Budget expectation standpoint, continued emphasis on digital payments, cybersecurity, and financial infrastructure would go a long way in strengthening trust across the ecosystem. These are foundational areas that directly impact how confidently consumers and businesses adopt digital credit,” says Ravindra Rai, Managing Director, and CEO of BOBCARD Limited.

“Union Budget 2025 delivered positive measures for the non-life insurance sector, including the increase in FDI to 100%, but insurance penetration in India remains low at around 1% of GDP, underscoring the need for deeper structural reforms. The next phase must focus on improving affordability, penetration, efficiency, and resilience. In health insurance, enhancing Section 80D limits to ₹50,000/ ₹1 lakh and extending full tax benefits to senior citizens with standalone policies will help address rising healthcare costs. Affordable insurance must be complemented by affordable and quality healthcare through closer integration of insurance with quality healthcare delivery. Standardised treatment protocols, regulated hospital pricing, and expanding OPD and preventive care—nearly 70% of healthcare spend—are critical to reducing out-of-pocket expenses. Government schemes like Ayushman Bharat should also extend coverage to outpatient care, diagnostics, and medicines. In agriculture, strengthening PMFBY through higher funding and technology-enabled faster claim settlements will protect farmer livelihoods. In motor insurance, long-pending ‘pay and recover’ awards continue to burden insurers. An ARC-like institutional mechanism to resolve these claims can unlock capital, improve recovery efficiency, and strengthen sector stability without diluting claimant protection. These measures align with India's 'Insurance for All by 2047' goal and could drive sector growth,” says Ashwani Dhanawat, Executive Director and Chief Investment Officer, Shriram General Insurance.

“As the Union Budget approaches, MARS Cosmetics hopes for GST reforms that will provide the beauty industry with more definitive and stable regulations. Simplification of GST compliance and reconsideration of tax rates for cosmetics could be instrumental in lowering prices and making products more accessible to consumers in tier-II and tier-III markets. Indigenous beauty MSMEs will benefit from quicker GST refunds and simpler input tax credit rules, resulting in better cash flows and stronger support for product innovations and market expansions. A predictable and fair GST system will enable Indian beauty brands to grow responsibly while strengthening the country's rapidly expanding cosmetics ecosystem,” says Anmol Sahai Mathur, VP Marketing, MARS Cosmetics.

“From a public health and economic standpoint, feminine hygiene and menstrual care must be viewed beyond sanitary pads alone. While sanitary pads are GST-exempt, several essential allied products such as toilet seat sanitizers, menstrual cups, intimate washes and other preventive hygiene products continue to attract GST, impacting affordability and adoption. We recommend a rationalized GST structure across the broader feminine and preventive hygiene category to ensure consistency and access,” says Shobhit Gupta, Senior Vice President- Finance, at Pee Safe.

“The targeted policy support from the budget, such as the extension of PLI benefits to energy-efficient consumer durables, the rationalization of GST on cooling appliances, incentives for local component manufacturing, and improved access to working capital for MSME-led dealer and distributor networks, will be crucial for the continuous growth of the sector from the very beginning. These steps not only make products more affordable but also allow the domestic manufacturing sector to grow and Indian consumer durables brands to become stronger in both the domestic and export markets,” says Kalpesh Ramoliya, Founder and Chairman, Raj Cooling Systems.

“As AI adoption accelerates globally, we hope the Union Budget 2026–27 takes a forward-looking view on enabling next generation agentic AI companies from India. Access to affordable high performance AI infrastructure will be critical, especially for firms building autonomous systems that require significant GPU capacity to scale responsibly and compete globally. Targeted R&D tax credits and accelerated depreciation for AI hardware would significantly strengthen India’s innovation ecosystem,” says Srikanth Chakkilam, CEO and Executive Director, Covasant Technologies.

“A key expectation is higher and clearly defined tax incentives for pure protection products, especially term life. Separating tax benefits for protection from savings-linked insurance would help close India’s protection gap, attract first-time buyers, and encourage people to prioritise risk cover over investment-oriented policies. The industry also looks forward to progress on composite licensing, which would allow insurers to offer life, health and general insurance under a single framework and can improve efficiency, reduce operational costs, and support the development of simpler, bundled products that are easier for customers to understand and afford. A Budget focused on affordability, trust and access can help advance the vision of Insurance for All by 2047,” says Prantik Mitra, Director - Client Advisory Group at Alliance Insurance Brokers.

“The Indian footwear and leather goods industry sits at a crucial inflection point as we head into the Union Budget. With India being the world’s second-largest producer of footwear but still under-indexed in value-added exports, the focus must now shift from volume to value, design, and brand-led manufacturing. We believe the upcoming Budget should prioritise rationalisation of GST on premium footwear and leather accessories, as the current inverted duty structure continues to impact margins and consumer pricing. A more uniform tax regime across materials, components, and finished products will significantly improve supply-chain efficiency and compliance,” says Amol Goel, founder and CEO of Louis Stitch

“Budget 2026 must continue with the government's focus on enabling MSMEs and start-ups to access capital more quickly and fairly through streamlined, collateral-free lending, and credit guarantees. While recent announcements have expanded credit guarantee coverage and introduced targeted instruments, many businesses still face high borrowing costs, slow loan approvals, and compliance burdens that stretch working capital. Building on the government’s year-end focus on ease of doing business, Budget 2026 should further simplify rules and reduce punitive compliance approaches that discourage formalisation. Continued support for MSME exporters through better export credit, interest subvention, faster duty refunds, and easier access to incentive schemes will be key to improving global competitiveness,” says Arun Poojari, CEO and Co-Founder of Cashinvoice.

Union Finance Minister Nirmala Sitharaman will present the Budget 2026 on 1 February.

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