Sectoral Expectations for the 2026 Union Budget: What to Watch

The anticipation for the Union Budget 2026-27 is at an all-time high, with Finance Minister Nirmala Sitharaman scheduled to present it on February 1, 2026. Various sectors, including FMCG, healthcare, automobile, metal, insurance, and telecom, are eagerly awaiting the announcement, hoping for specific concessions and reforms. These expectations are driven by the need for economic growth, fiscal discipline, and sector-specific support. Here’s a detailed look at what each sector is hoping to see in the upcoming budget.

Senior Citizens: Increased Tax Relief

According to Tarun Garg, Executive Director at Deloitte India, the Union Budget 2026 is likely to bring increased tax exemptions on interest income and medical relief for senior citizens. Given the rising medical expenses and higher healthcare costs, the government may consider additional tax relief. Currently, the deduction limits on interest income are set at Rs 10,000 for non-senior citizens and Rs 50,000 for senior citizens. Many are advocating for a raise in these limits to help senior citizens manage inflation and the increasing cost of living.

Debt Consolidation and Capital Expenditure

The government is expected to prioritize medium-term debt consolidation while maintaining a strong push for capital expenditure in the 2026-27 Union Budget. According to ICRA, the Centre’s fiscal deficit is projected to be around 4.3% of GDP, slightly below the 4.4% targeted for 2025-26, supported by an estimated 9.8% growth in nominal GDP. This focus on fiscal prudence and investment is crucial for sustainable economic growth.

Stock Markets to Remain Open

India’s stock markets will remain open for trading on the day of the Union Budget, February 1, 2026. Both the National Stock Exchange (NSE) and BSE Ltd. will operate as usual, with the pre-open session starting at 9:00 am and normal trading hours from 9:15 am to 3:30 pm. This decision ensures market participants can react to budget announcements in real-time.

Commercial Real Estate: Stability and Predictability

Utkarsh Kawatra, CEO and co-founder of ANAROCK myHQ, believes the Union Budget 2026 is unlikely to bring major changes to the commercial real estate sector. However, this is seen as a positive sign, as offices require stability and predictability more than incentives. Stability in policies and regulations will foster a conducive environment for commercial real estate development.

Real Estate: Focus on Affordability

Tanuj Shori, Founder and CEO of Square Yards, emphasizes the need for enhanced tax relief for mid-income homebuyers, higher interest deduction limits, and sustained investment in urban infrastructure. The budget should focus on affordability to correct the current skew towards high-ticket launches. Policy support is crucial to ensure that more families can achieve home ownership and benefit from the real estate market.

Infrastructure and Housing

Vikas Bhasin, Managing Director of Saya Group, underscores the importance of infrastructure-led development in the government’s growth strategy. The budget should continue to invest in infrastructure that connects people, making cities more livable, efficient, and accessible. Expanding the Credit Linked Subsidy Scheme (CLSS) will also help more families achieve home ownership, contributing to the overall development of the real estate sector.

Banking Sector: Transformation and Governance

The 2026 Union Budget may signal a significant transformation for public sector banks (PSUs) with the introduction of a Banking Governance Bill. This bill aims to bring modern management practices and strengthen PSU bank governance. Key changes will focus on professionalism, competitiveness, and global alignment. The bill is expected to enhance board composition, ensuring greater independence and sector expertise, and attract top-quality leadership comparable to private banks.

Pollution Control in Delhi

Sources suggest that the Union Budget 2026 will address the growing issue of air pollution in Delhi and other major cities. Specific funding is likely to be allocated to control pollution levels, support cleaner practices, and enforce stricter regulations on industrial pollution. A proposal to convert around 3,500 industrial units to clean fuel alternatives is under active consideration and may receive formal approval in the budget. This initiative aims to reduce the environmental impact and improve air quality in urban centers.

Conclusion

The Union Budget 2026-27 is poised to be a critical document, shaping the economic landscape of India for the next fiscal year. From increased tax relief for senior citizens to a focus on infrastructure and pollution control, the budget is expected to address a wide range of issues and provide the necessary support to various sectors. As the nation awaits the announcement, the hopes and expectations of industry leaders and experts will play a significant role in shaping the government’s fiscal policies.