Budget 2026: High Stakes, Global Headwinds and Big Domestic Bets

Budget 2026: High Stakes, Global Headwinds and Big Domestic Bets

Mangalore Today News Network

Mangaluru, Jan 25, 2026: Finance Minister Nirmala Sitharaman will present the Union Budget 2026–27 on February 1, marking a rare Sunday budget and the opening act of Parliament’s Budget Session that begins on January 28. The Budget comes at a crucial juncture for India, with the global economy facing mounting geopolitical tensions, slowing trade and renewed tariff shocks from the United States.

All eyes will be on how the Modi government plans to shield India’s growth momentum, particularly exports, from the impact of steep tariffs imposed by US President Donald Trump. The Budget is expected to spell out strategies to insulate key sectors from global trade disruptions while sustaining domestic demand and investment.

As always, salaried taxpayers are keenly awaiting announcements on income tax relief, simpler compliance, and rationalisation of TDS and TCS norms. At a broader level, Budget 2026 will be closely tracked for signals on GDP growth projections, capital expenditure, defence outlays and the government’s fiscal consolidation roadmap.

Push for EVs and Clean Mobility
One of the key focus areas is expected to be electric mobility. Experts anticipate stronger fiscal and policy support to accelerate the adoption of electric vehicles (EVs) and strengthen domestic manufacturing. Deloitte India Partner Sheena Sareen said the government may realign the Production-Linked Incentive (PLI) scheme for EVs and advanced automotive components, alongside targeted tax incentives for R&D and capital goods manufacturing.

Such measures, she noted, could reduce dependence on imported technologies, support indigenisation and cut crude oil imports, helping conserve foreign exchange. Easing eligibility norms under incentive schemes and sustained investment in R&D are also seen as critical to building a self-reliant EV ecosystem.

Real Estate, Housing and Urban India
The real estate sector is seeking a reset in housing-related tax policies to reflect current urban realities. Industry leaders argue that the existing ₹45 lakh cap for affordable housing and the 1% GST benefit no longer align with rising land and construction costs. Calls have been made to raise the affordable housing price band to ₹80–90 lakh, cut GST on works contracts and boost allocations for PMAY-Urban, with faster approvals to revive stalled projects and expand supply.

Several developers have also urged the government to treat housing as essential infrastructure, rationalise GST on under-construction homes and extend targeted tax deductions, particularly in Tier-2 and emerging urban centres.

States, Welfare and Inclusive Growth
From the states, Uttar Pradesh Chief Minister Yogi Adityanath underscored that public welfare must remain the “soul of the budget”. He said the next financial year’s budget should balance citizens’ aspirations, regional priorities and long-term development goals, with a clear focus on improving the lives of the poor, farmers, workers, women and youth.

Export Sectors Seek Relief
Export-driven sectors are pressing for relief amid global uncertainty. The gem and jewellery industry has sought duty cuts, GST rationalisation and procedural reforms to stay competitive as high US tariffs and shifting supply chains reshape global trade. The Gem and Jewellery Export Promotion Council (GJEPC) said the right policy mix could help India emerge as a global hub for diamond trading and value discovery.

Similarly, MSME-heavy sectors—from digital media and e-retail to healthcare manufacturing—are calling for easier access to credit, GST simplification, enhanced PLI support and faster regulatory approvals to address the “missing middle” in financing and unlock scale.

Consumption, Services and New-Age Economy
Retail, furniture, home décor and hospitality players see Budget 2026 as a chance to boost consumption through tax relief, lower logistics costs and GST rationalisation. Industry leaders believe that higher disposable incomes, improved multimodal logistics and MSME-friendly credit norms could unlock demand in Tier-2 and Tier-3 cities.

The hospitality and foodservice sector, riding on tourism and experiential spending, is looking for continued infrastructure investment, clarity in compliance norms and support for skill development to strengthen India’s services-led growth story.

Infrastructure, Cybersecurity and Food Security
Beyond traditional capex, experts have called for recognising cyber-physical security of critical national infrastructure as a core budget priority. With power, transport and energy systems increasingly digitised, industry leaders are seeking dedicated funding for OT/ICS cybersecurity, resilient communications networks and indigenous manufacturing.

The dairy sector, a backbone of rural livelihoods, is also looking for targeted support through GST rationalisation on inputs, cold-chain infrastructure investment and incentives for value-added products to enhance farmer incomes and reduce wastage.

A Defining Budget
As India navigates a volatile global environment, Budget 2026 is being seen as a defining exercise—one that must balance fiscal discipline with growth, protect exports while fuelling domestic consumption, and align welfare priorities with long-term competitiveness. Whether it can effectively insulate the economy from global trade wars while advancing India’s development agenda will be closely watched in the days ahead.