Industry Demands Emerge
Industry leaders are actively advocating for specific measures in the 2026 budget. A significant push is underway to double infrastructure spending, potentially
reaching Rs 3 lakh crore, to accelerate economic growth. Experts from KPMG are urging the government to prioritize tax clarity and expedite dispute resolution processes to foster a more business-friendly environment. Furthermore, Morgan Stanley has pinpointed key reforms needed across sectors like auto, telecom, railways, and defense, indicating a focus on comprehensive sector-specific policies to boost overall economic performance. The auto industry, specifically, is seeking incentives for electric vehicles (EVs) and clarity on GST, aligning with the broader push towards sustainable and efficient growth models.
Taxation Regime Insights
The 2026 budget is expected to bring significant changes to the taxation system, with considerable interest surrounding the New Tax Regime. Experts are examining how the government can make this regime more attractive, potentially including provisions for deductions on home loans and health insurance. There is a strong possibility that joint taxation for married couples might become a reality, offering flexibility in financial planning. Moreover, tax experts are urging for higher deductions and relief in the 30% tax slab. The new income tax provisions are set to become effective from April 1, with the goal of simplifying the existing regulations. The expectations surrounding these potential changes highlight the government's aim to balance tax collection with the financial well-being of citizens.
Economic Growth Projections
India's economic outlook for the coming years is positive, with several organizations projecting robust growth. The IMF has upgraded India's growth forecast to 7.3% for 2025, even amidst global trade tensions and tariff uncertainties. Moody's also anticipates a 7.3% growth rate for FY26. This optimistic outlook is supported by a rising demand in various sectors, including insurance and real estate, demonstrating a solid foundation for continued economic expansion. Furthermore, SBI Research projects that India is on track to become an upper-middle-income country by 2030, with a $5-trillion economy expected in the next two years, pointing to a consistent and substantial increase in economic stature.
Market & Investment Trends
The financial market in India displays a complex interplay of various factors. While the Sensex and Nifty have shown volatility with fluctuations, the real estate sector is witnessing significant capital inflows. Capital inflows into India's real estate sector have surged by 25%, reaching a record $14.3 billion in 2025, according to CBRE. Amidst these market dynamics, the performance of specific stocks, like those in the railway sector, is under close scrutiny by experts. Simultaneously, the rising interest in flexi-cap funds demonstrates evolving investment preferences. Sovereign Gold Bonds have shown a 370% return, attracting investors. These trends highlight the evolving dynamics of the investment landscape.
Budget Agenda Details
The 2026 budget agenda is expected to include a significant emphasis on technological advancements and socio-economic support. A key focus is anticipated to be on Artificial Intelligence (AI) integration in health and agriculture. The government is also expected to offer tax relief on home loans and insurance, along with possible import duty cuts. The extension of the Atal Pension Yojana by five years showcases the government’s continued commitment to social security, allowing beneficiaries to receive up to Rs 5,000 in pension. The overall approach of the budget emphasizes a balance of technological innovation, tax relief, and social welfare programs to drive comprehensive growth across sectors.
