Goa Chief Minister Pramod Sawant attended the pre-budget meeting for Union Budget 2026-27 in New Delhi, where he presented the state's developmental priorities and sought more equitable funding arrangements with the Centre. The meeting, chaired by Union Finance Minister Nirmala Sitharaman on Saturday, brought together finance ministers from various states and Union Territories along with senior officials to discuss key provisions for the upcoming budget.

Key Demands and Priorities

During the meeting, Sawant emphasized Goa's unique geographical and ecological challenges while presenting the state's funding requirements. The Chief Minister sought a more equitable Centre-state funding pattern under centrally sponsored schemes, highlighting three critical factors that make Goa's situation distinct:

Infrastructure and Development Focus

The discussions covered multiple developmental aspects crucial for Goa's growth trajectory. Sawant presented detailed requirements for sustaining momentum in critical infrastructure projects while seeking continued support for capital investment. The state also emphasized the importance of carrying forward state-specific Finance Commission recommendations to ensure comprehensive development.

Special attention was given to improving industrial and logistics connectivity, with particular focus on enhancing rail links to major urban centres. The Chief Minister highlighted the need for developing climate-resilient infrastructure to effectively address coastal and environmental challenges that are unique to the state.

Social Welfare and Sustainability Initiatives

The meeting addressed various social and environmental priorities that align with national development goals. Key areas of discussion included:

• Augmenting healthcare capacity to meet growing demands
• Strengthening waste management and sanitation systems
• Supporting tourism diversification and skill development programs
• Accelerating transition towards renewable and clean energy sources

These initiatives are designed to support India's national climate commitments while addressing Goa's specific developmental needs.

Vision Alignment

Sawant emphasized that these consultations represent an important step towards aligning state aspirations with national development objectives. The discussions were framed within the context of Goa's journey towards Viksit Goa 2037, which harmonizes with the broader national vision of Viksit Bharat 2047. This alignment ensures that state-level development plans contribute effectively to the country's overall growth strategy while addressing local priorities and challenges.

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.