Budget 2026 Expectations Updates: What To Expect For Defence, MSMEs And India's Growth

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Shashi Kant Singh, partner at agriculture, food and agribusiness, PwC India, says that "the expectations from this year's budget are enhanced outlays for the sector to sustain the government's aspirations towards self-sufficiency and position India as a global agricultural powerhouse. Research and development (high yielding and climate resilient varieties), infrastructure (production, storage and processing), digital agricultural solutions (ag stack and AgTech) and exports (quality and higher value capture) should be the key focus areas for the upcoming budget."

Govind Sankaranarayanan, Co-founder & COO, Ecofy expects "measures that can accelerate green lending at scale. The proposed establishment of a dedicated Green Finance Institution (GFI) can be a game-changer, offering credit guarantees, concessional finance, and securitisation support that substantially lower risks and borrowing costs. Along with targeted incentives for EVs, rooftop solar, and industrial decarbonisation, such institutional support can expand the green credit pipeline and help India stay aligned with its 2030 climate ambitions. The next phase of growth will depend on how effectively policy and finance converge to de-risk and scale sustainable investments across sectors."

Vedanta's iron ore mining arm, Sesa Goa, has urged the government to provide incentives for low-grade iron ore beneficiation, emphasising that targeted policy support and infrastructure investment are critical to make the processing economically viable and to expand the sector, reports PTI.

Ashish Singhal, Co-founder, CoinSwitch says "India’s Virtual Digital Assets (VDA) ecosystem is at a pivotal stage, with growing adoption across the country. However, the current tax framework presents challenges for retail participants by taxing transactions without recognising losses, creating friction rather than fairness. A reduction in TDS on VDA transactions from 1% to 0.01% could improve liquidity, ease compliance, and enhance transparency while preserving transaction traceability. Raising the TDS threshold to ₹5 lakh would help protect small investors from disproportionate impact." 

Speaking to PTI, Skoda Auto Volkswagen India MD and CEO Piyush Arora vouched for policy continuity ahead of the Union Budget 2026.

"And from that point of view, if there are some important duties in the electric (vehicle) space that can be addressed (in the Budget) going forward, it would help... Continuity is extremely important for our sector, along with further focus on infrastructure growth and building up the EV ecosystem," he said.

Anand Bhadkamkar, Group CFO, LS Digital says “As businesses integrate AI, MarTech, and AdTech into their core operations, the clarity and direction provided by the Union Budget become critical for sustained digital growth. However, with regulatory headwinds like the DPDP Act and economic pressures on operating costs, Indian digital businesses need clearer policy signals, especially around compliance automation, data governance, and incentives that encourage domestic technology adoption. This will be key to translating policy intent into real, long-term investments and ensuring India remains competitive in the global digital economy."

"We hope to see dedicated funding for design-led research and development, creative-technology labs, and industry-linked universities that translate knowledge into products, services and cultural exports. Supporting institutions that integrate design, technology, sustainability and entrepreneurship will help India move from being a cost-competitive economy to a globally competitive innovation economy," Sanjay Gupta, vice chancellor, World University of Design, said.

Dipanjan Banerjee, Chief Commercial Officer, Blue Dart says “Budget 2026 presents a timely opportunity to catalyse the next phase of efficiency-led growth across India’s logistics sector. Supportive policy measures that make cross-border e-commerce easier for MSMEs, digitise trade flows and streamline documentation can unlock significant B2C export potential from Tier 2 and Tier 3 markets. At the same time, the Budget must continue to back high-growth sectors like new energy, electronics, and life sciences where specialised logistics capability and high-compliance handling are now essential enablers of industrial competitiveness. Rationalising taxation on green transport technologies, expanding EV charging ecosystems and accelerating pathways for Sustainable Aviation Fuel (SAF) will help future-proof logistics networks while supporting national climate goals." 

"There is hope for greater fiscal support for emerging areas such as green hydrogen, energy storage, grid modernisation, and industrial decarbonisation," Vasudha Madhavan, founder and chief exeuctive officer of Ostara Advisors said.

"It would also be encouraging to see a continued emphasis on electric mobility through more targeted subsidies, steady investment in public and urban charging infrastructure, and incentives that support domestic manufacturing of EV components and strengthen supply chains," Madhavan added.

Dr. Mukesh Batra, Founder-Chairman Emeritus, Dr Batra’s Healthcare says “For 2025-26, the Ministry of Health was allocated close to ₹1 lakh crore, reflecting a 10–11% increase and reaffirming the government’s commitment to strengthening healthcare capacity. As we look ahead to Budget 2026-27, there is a significant opportunity to build on this momentum by re-orienting healthcare delivery towards prevention, early intervention, and personalized care. We also expect the forthcoming Budget to strengthen insurance coverage and wellness provisions to include long-term preventive care, while accelerating investments in digital health infrastructure and community-based clinics."

"We hope to see dedicated funding for design-led research and development, creative-technology labs, and industry-linked universities that translate knowledge into products, services and cultural exports. Supporting institutions that integrate design, technology, sustainability and entrepreneurship will help India move from being a cost-competitive economy to a globally competitive innovation economy," Sanjay Gupta, vice chancellor, World University of Design, said.

Amit Vatsyayan, Leader – GPS (Agriculture, Livelihood, Social and Skills), EY India, outlines priorities. “Scaling climate-resilient irrigation, micro-irrigation and renewable-powered agri assets can unlock productivity gains. At the same time, PPPs in storage, logistics and R&D are critical to reducing post-harvest losses and improving price realisation.”

"A forward‑looking Budget that positions general insurance as essential economic and social infrastructure anchored in digital enablement, affordability, home and MSME protection, and climate‑risk financing can significantly deepen insurance penetration and support the nation’s long‑term trajectory of inclusive and resilient growth," says Rakesh Jain, CEO, IndusInd General Insurance.

According to Nuvama, tax relief is unlikely to be a major lever in FY27. “With recent income tax and GST rationalisation already weighing on revenues, further tax cuts appear unlikely. FY27 is more likely to focus on investment support through deregulation and capex rather than additional consumption-led measures.”

“Elders need specialised geriatric care rooted in dignity and compassion. For those battling life-limiting illnesses, especially the rural poor, the support and care outside hospitals, at their homes or communities, is often left unaddressed, leading to immense suffering. While policies already recognise Palliative Care under NHM, NPHCE & Ayushman Arogya Mandir (AAM) program (included as one of the 12 essential services package), a national mission approach with dedicated resources and timelines is urgently required to fully operationalise this. We also urge financial support under PM‑JAY for home‑based palliative and caregiving services through registered providers,” says Rohit Prasad, CEO, HelpAge India.

Economists at Citi expect infrastructure spending to remain steady. “We expect continued emphasis on public capex in FY27, led by defence and urban infrastructure. While overall capex growth should stay above nominal GDP growth, allocations may become more selective, with greater use of off-budget and PSU-led spending.”

Naval Kagalwala, COO & Head of Products, Shriram Wealth Ltd., expects gross market borrowing to remain elevated in FY27 as many existing bonds are coming due. This is starting to weigh on the bond market and 10‑year yields have risen in recent sessions even though the RBI has tried to ease liquidity through measures like OMOs and dollar‑rupee buy‑sell swaps, Kagalwala said.

Shashi Kant Singh , Partner—Agriculture, Food and Agribusiness, PwC India says that "the expectations from this year's budget are enhanced outlays for the sector to sustain the government's aspirations towards self-sufficiency and position India as a global agricultural powerhouse. Research and development (high yielding and climate resilient varieties), infrastructure (production, storage and processing), digital agricultural solutions (ag stack and AgTech) and exports (quality and higher value capture) should be the key focus areas for the upcoming budget."

Govind Sankaranarayanan, Co-founder & COO, Ecofy expects "measures that can accelerate green lending at scale. The proposed establishment of a dedicated Green Finance Institution (GFI) can be a game-changer, offering credit guarantees, concessional finance, and securitisation support that substantially lower risks and borrowing costs. Along with targeted incentives for EVs, rooftop solar, and industrial decarbonisation, such institutional support can expand the green credit pipeline and help India stay aligned with its 2030 climate ambitions. The next phase of growth will depend on how effectively policy and finance converge to de-risk and scale sustainable investments across sectors."

Vinay Rustagi, Chief Business Officer at Premier Energies says that  "The renewable sector has been a major priority area for the government and we expect more favourable announcements supporting the sector in this budget. The two signature schemes, PM Surya Ghar Yojana and PM KUSUM are expected to ramp up significantly and should get much higher budgetary allocation. We are also expecting rollout of the PM KUSUM 2.0 scheme with higher targets and incentives. Other focus areas should be incentive packages for R&D as well as local manufacturing of ingots and wafers to improve self-sufficiency for Solar module manufacturing."