Industry leaders across real estate, insurance, FMCG, infrastructure, telecom, biotechnology and hospitality sectors are calling for targeted fiscal support, tax rationalization and faster policy execution ahead of Union Budget 2026. The collective demand centers on sustaining India's growth momentum amid global uncertainty through ease of doing business measures, affordability initiatives and long-term policy visibility.

Real Estate Sector Seeks Growth-Focused Incentives

Real estate developers are prioritizing policy continuity and buyer-friendly measures, particularly for the National Capital Region (NCR) market. The sector's key demands focus on supporting residential and commercial activity through multiple policy interventions.

Ashish Agarwal, Director at AU Real Estate, emphasized that stable policies and growth-focused incentives will be crucial for sustaining momentum in the NCR luxury housing market. He noted that increasing incomes, wider global exposure and preference for secure, amenity-rich communities are driving demand for premium homes.

Parvinder Singh, CEO of Trident Realty, highlighted that infrastructure bottlenecks and approval delays remain key challenges. The sector is also pushing for easier access to home loans and incentives for first-time buyers to support long-term demand.

Senior Living Recognition Sought

The upcoming Budget presents an opportunity to formally recognize senior living as a distinct real estate category. Anil Godara, Founder and Managing Director of J Estates, said the aging population requires well-designed, secure retirement communities with appropriate policy support including GST rationalization and clear guidelines.

Insurance Industry Demands Enhanced Tax Benefits

Insurance companies are advocating for deeper tax incentives and broader risk coverage to improve market penetration. The sector's expectations span health insurance, agricultural insurance and life insurance reforms.

Subrata Mondal, Managing Director and CEO of IFFCO-TOKIO General Insurance, welcomed recent GST rationalization on health insurance but emphasized that current income-tax deduction limits under Section 80D do not reflect rising medical inflation. He suggested doubling the deduction would encourage households to opt for adequate health cover.

Sharad Mathur, MD and CEO of Universal Sompo General Insurance, said achieving 'Insurance for All by 2047' requires shared digital infrastructure and sustained funding for insurance literacy programs.

FMCG and Telecom Sectors Eye Growth Support

FMCG players remain optimistic about continued consumption support through policy measures. Praveen Jaipuriar, CEO of CCL Products (India) Ltd, noted that GST rationalization in 2025 helped improve affordability and demand across key consumer categories. The sector is also highlighting the role of Free Trade Agreements in boosting export competitiveness.

The telecom sector seeks targeted support for transitioning toward AI-native networks. Industry leaders are calling for strengthened production-linked incentives for indigenous manufacturing and capex support for next-generation infrastructure to boost India's self-reliance and global competitiveness.

Hospitality and Coworking Sectors Push for Industry Status

The hospitality sector continues advocating for comprehensive infrastructure status beyond current partial recognition. Shwetank Singh, Executive Director of Chalet Hotels Limited, emphasized that infrastructure classification unlocks soft financing and rationalized costs, while bringing tourism into the concurrent list can improve Centre-State coordination.

Coworking operators are pushing for tax rationalization to support India's hybrid work transition. Sanjay Chatrath, Co-founder and Managing Partner of Incuspaze, said lowering GST on coworking services and allowing full input tax credit on fit-outs would improve cost efficiency.

Infrastructure and Cement Outlook

Infrastructure spending remains a key growth lever for the cement sector. Maitri Vira, Assistant Vice President and Sector Head at ICRA, expects sustained government focus on infrastructure, rural economy and affordable housing to support cement demand growth of 6-7 percent in FY2027. Rural housing and infrastructure account for over half of cement consumption, making increased allocations toward roads, railways, metros and urban infrastructure critical for volume visibility.

As Budget 2026 approaches, industry expectations reflect a clear demand for policy continuity, targeted tax relief and infrastructure-led growth. The government's response to these sectoral demands will significantly influence investment sentiment and economic momentum in the coming year.

Tax policy experts have presented comprehensive recommendations for Budget 2026 to enhance India's mergers and acquisitions environment, particularly with the Income-tax Act, 2025 scheduled for implementation from April 1, 2026. The suggestions aim to address existing regulatory gaps and improve the ease of doing business for M&A transactions.

Fast-Track Demerger Tax Neutrality

A primary recommendation involves extending tax neutrality to fast-track demergers under Section 233 of the Companies Act, 2013. Currently, the Income-tax Act, 2025 provides tax neutrality only to NCLT-approved demergers under Sections 230 to 232, excluding fast-track demergers that enable small or closely held companies to undertake demergers without court approval.

The finance ministry's rationale for excluding fast-track demergers centers on concerns about potential valuation manipulation without court oversight. However, experts argue this approach contradicts the ease of doing business agenda, forcing genuine taxpayers to choose between transaction efficiency and tax benefits.

Contingent Consideration Clarity

Experts emphasize the need for clear taxation guidelines on earn-out, profit-linked, or contingent consideration arrangements that have become increasingly common in M&A transactions. These arrangements tie part of the sale consideration to achieving specific profitability or financial milestones.

The current legal framework lacks clarity on:

• Taxability of contingent payments
• Timing of taxation for such arrangements
• Treatment of milestone-based considerations

Foreign Company Merger Anomalies

The recommendations address existing inconsistencies in foreign company merger taxation. While foreign companies enjoy capital gains tax exemptions on direct or indirect share transfers during mergers with other foreign companies, shareholders of the amalgamating company face potential capital gains liability on share swaps.

This creates an anomaly compared to domestic mergers, which provide exemptions at both company and shareholder levels.

Capital Gains Tax Rate Concerns

The recent capital gains tax regime rationalization introduced higher long-term capital gains tax rates, which experts suggest adversely impacts investor returns and exit efficiency. The increased rates potentially drive investors toward jurisdictions with more favorable tax regimes.

Key concerns include:

• Reduced post-tax returns for investors
• Decreased competitiveness with other investment destinations
• Impact on foreign capital attraction

Experts recommend reducing capital gains tax rates, suggesting restoration of the earlier 10.00% rate to improve India's competitive position in attracting foreign investment.

Strategic Implementation Timeline

With the Income-tax Act, 2025 set for April 1, 2026 implementation, Budget 2026 represents the final opportunity to incorporate these amendments before the new framework takes effect. The recommendations aim to position India as a preferred destination for cross-border M&A activities while maintaining regulatory integrity and supporting corporate growth objectives.