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.

India's Union Budget 2026 is expected to prioritise defence-led capital spending while maintaining fiscal discipline, according to a budget preview by Motilal Oswal. The brokerage anticipates the February 1 exercise will focus on defence and allied industries, infrastructure-linked manufacturing, power, electronics, pharmaceuticals and critical minerals, while keeping revenue expenditure under control.

Fiscal Deficit and Growth Projections

Motilal Oswal expects the gross fiscal deficit to decline marginally to 4.3% of GDP in FY27 from 4.4% in FY26, marking a shift towards using debt-to-GDP as the primary fiscal anchor. The budget framework assumes nominal GDP growth of approximately 10.1%, providing limited room for growth support without compromising fiscal consolidation.

Capital Expenditure Focus

The brokerage forecasts capital expenditure to rise 10.3% year-on-year to ₹12.40 trillion in FY27, maintaining its share at around 3.1% of GDP. Defence and allied industries are expected to lead this capex push, with the Defence Acquisition Council already approving capital acquisition proposals worth ₹790.00 billion in its winter session.

The FY26 year-to-date defence approvals of approximately ₹3.30 trillion represent nearly double the budgeted defence capital outlay for the year. Other priority sectors include nuclear energy, electronics manufacturing, power, pharmaceuticals and strategic investments in critical minerals.

Revenue Projections and RBI Dividends

On the revenue front, Motilal Oswal projects steady growth with direct taxes expected to track nominal GDP growth, reaching ₹25.70 trillion in FY27. Indirect taxes, including GST collections, are likely to grow at a slower pace. Non-tax revenues will play a crucial role, with dividends from the RBI and public sector undertakings estimated to rise to ₹3.80 trillion in FY27, supported by RBI's dollar sales boosting central bank profitability.

Borrowing Requirements and Bond Yield Outlook

Despite marginal deficit improvement, borrowing requirements remain elevated. The Centre's gross market borrowings are forecast at ₹16.50 trillion in FY27, with net borrowings of ₹11.90 trillion. State governments are expected to add ₹13.20 trillion in gross borrowing, taking aggregate Centre plus state gross borrowing to ₹29.70 trillion.

This heavy supply, combined with subdued demand from banks, insurers and foreign investors, is likely to keep the 10-year government bond yield in the 6.5% to 6.7% range through FY27.

Investment Themes and Market Outlook

Motilal Oswal views Budget 2026 as a reaffirmation of existing strategy rather than a policy pivot. For equity investors, preferred themes remain defence and allied industries, infrastructure-linked manufacturing, power, electronics, pharmaceuticals and critical minerals. The budget arrives after a normalisation in government capital spending execution and cooling investor enthusiasm for capex-linked sectors, making it a test of policy credibility for sustaining India's capex-led growth narrative.