As India prepares for the Union Budget 2026-27, a survey indicates a shift in industry sentiment towards focusing on policy direction, continuity, and execution rather than headline announcements. The upcoming budget is viewed as a signal of India’s medium-term economic intent amidst global uncertainty and a planned fiscal deficit of about 4.4% of GDP. Companies are looking for stable policy frameworks, practical incentives, and smoother execution to make long-term decisions amidst the expected 6.5–7% economic growth in FY26.
Against the backdrop of a significant increase in central government capital expenditure compared to FY20 levels, businesses are emphasizing the importance of stable policies for capacity planning, supply chains, and decarbonization efforts. Respondents to the survey express varying opinions on fiscal strategy, with some prioritizing growth and employment, while others advocate for a balance between deficit control and growth-oriented spending. Strong fiscal prudence is also highlighted as essential for sustaining investor confidence.
Trade-related priorities include a simplified and predictable export-incentive framework as the top concern, followed by the need to finalize free trade agreements with key partners. Businesses are particularly focused on minimizing disruptions during the transition to the New Income Tax Act, seeking extended transition timelines, dedicated support channels, and government-industry consultations. Additionally, there is a call for lower tax rates or wider slab intervals to enhance the attractiveness of the new tax regime for salaried taxpayers.
The survey underscores the importance of sector-specific innovation funds, weighted tax deductions for research and development, and public-private partnerships in research to drive innovation. Certainty in long-term infrastructure investment is highlighted as crucial, with stability in tax regimes for infrastructure investment trusts (InvITs), real estate investment trusts (REITs), and infrastructure bonds identified as key triggers for attracting long-term capital. Renewable energy and storage infrastructure emerge as the top priority area, followed by urban infrastructure and transport and logistics.
