As Union Budget 2026 approaches, industry leaders across sectors are delivering a unified message to the government: prioritise policy clarity, regulatory stability, and execution-led reforms over big-bang announcements or fiscal exuberance. With tax revenues under pressure and competing demands on public spending, India Inc is calling for strategic refinements that unlock growth without straining the fiscal balance sheet.

Fiscal Discipline Takes Centre Stage

According to Gaurav Garg, Research Analyst at Lemonn Markets Desk, the government is likely to maintain tight focus on fiscal discipline while continuing support for priority areas including defence, renewable energy, semiconductors, and manufacturing. With tax collections impacted by last year's income-tax relief measures, expectations centre on consumption recovery and private investment driving growth while public capex expansion remains measured.

The consensus across sectors reflects a notable shift from previous years, with industry leaders emphasising that Budget 2026 should be a carefully calibrated exercise focusing on removing friction points that constrain investment rather than introducing sweeping new schemes.

Digital Assets Sector Seeks Tax Framework Refinement

The cryptocurrency and digital assets ecosystem continues to advocate for balanced regulatory and taxation reforms. Ashish Singhal, Co-founder of CoinSwitch, argues that the current tax framework introduced in 2022 creates disproportionate friction for retail investors by taxing transactions without recognising losses.

Key expectations from the digital assets sector include:

SB Seker, Head of APAC at Binance, views Budget 2026 as an opportunity for measured regulatory refinements that balance innovation with financial stability. With oversight mechanisms like FIU-IND now established, industry participants believe conditions are appropriate for a more mature policy approach to virtual digital assets.

Logistics Infrastructure Emerges as Growth Enabler

Logistics is positioning itself as a critical enabler for India's next growth phase. Balfour Manuel, Managing Director of Blue Dart, believes Budget 2026 could serve as an inflection point if policy attention shifts decisively towards multimodal integration and digital coordination across air, road, and rail networks.

For express logistics, Manuel emphasises sustained investment in airport infrastructure, cargo handling capacity, and regional air connectivity to reduce turnaround times for high-value shipments. He advocates for:

• Unified logistics platforms and data-driven visibility systems
• Paperless processes to improve business ease
• Differential taxation encouraging greener transport modes
• EV charging and alternative fuel infrastructure investments
• Enhanced last-mile road connectivity for deeper market penetration

Capital Markets Seek Consistency Over Concessions

Capital markets participants are calling for coherence rather than concessions. Harsha Vardhana, Founder and Group CEO of Atom Financial Services, notes that investors seek simple, consistent, and predictable rules rather than lower taxes.

As investor participation broadens across equities, debt, and alternative assets, inconsistencies in capital gains treatment and holding periods are distorting investment behaviour. Clearer definitions of long-term ownership across asset classes could reduce short-term churn and encourage patient capital formation.

Manufacturing and Social Infrastructure Focus

Sunrise manufacturing sectors are positioning themselves as long-term growth drivers. Ricky Vasandani, CEO and Co-founder of Solitario, highlights that lab-grown diamonds have gained momentum after recognition under Make in India and removal of customs duty on diamond seeds. Continued policy stability, expanded R&D incentives, and easier financing access could help India emerge as a global hub for sustainable diamonds.

In social infrastructure, India's ageing population creates new policy challenges. Neha Sinha, Dementia Specialist and CEO of Epoch Elder Care, points to underfunded public programmes for senior care. She sees Budget 2026 as an opportunity to strengthen eldercare through higher allocations, GST rationalisation for senior care services, and development of long-term care insurance frameworks.

Real Estate Emphasises Regulatory Clarity

The real estate sector prioritises stability over stimulus measures. Vimalendra Singh, Chief Business Officer – Residential at Mahindra Lifespace Developers, stresses that regulatory clarity remains essential for responsible capital allocation and long-term planning.

Key real estate sector expectations include:

Industry Consensus on Execution Over Announcements

Across sectors, the prevailing sentiment reflects a mature approach to budget expectations. Industry leaders are not seeking increased government spending but rather improved spending efficiency, regulatory clarity, and policy predictability. In a year defined by fiscal constraints, Budget 2026's success may be measured not by announcement magnitude but by its effectiveness in sharpening execution, building confidence, and aligning policy frameworks with India's long-term growth ambitions.

This shift in industry expectations underscores the recognition that sustainable growth requires structural improvements in policy implementation rather than short-term fiscal stimulus measures.

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.