Market Update: We break down the business implications, market impact, and expert insights related to Market Update: Union Budget Expectations 2026 Live Updates: Amid Trump’s Tariff Warnings, All Eyes on FM Sitharaman’s Budget—More Income Tax Relief Ahead? What Experts Say – Full Analysis.
Income Tax & Middle-Class Relief
After last year’s major overhaul, experts expect incremental tweaks rather than sweeping changes. Key hopes include raising the standard deduction to ~₹1 lakh, slab rationalisation (including a higher threshold for the 30% slab), and allowing Section 80D health insurance benefits under the new regime. Housing incentives such as Section 80EEA revival, PMAY expansion, and higher rebates for mid-income buyers are also in focus.
Capital markets are watching for higher equity LTCG exemption (₹2 lakh vs ₹1.25 lakh), possible rate easing, higher TDS thresholds, simpler compliance, and extended ITR deadlines.
Capex & Infrastructure
High public spending is expected to continue, with ₹11–12 lakh crore capex likely for roads, railways, urban infra, green energy, and defence. Defence outlays may rise amid border tensions, alongside a push for Atmanirbhar manufacturing, PPP models, asset monetisation, and private investment in logistics.
Fiscal Discipline
The fiscal deficit target is expected to stay around 4.4% of GDP (or improve marginally), with caution amid global headwinds, trade risks, and signs of softer domestic consumption.
Sectoral Focus
Manufacturing and exports may see PLI extensions, duty cuts, and export incentives. Clean energy, EVs, and green hydrogen are likely to get higher allocations. Agriculture could benefit from MSP support and rural schemes, while education, skilling, MSMEs, startups, real estate, defence, and electronics are expected to see targeted support and compliance easing.
Macro & Market View
With FY26 GDP growth projected at 7–7.5%, markets will watch for capex continuity, equity-friendly tax moves, and reform signals. The Economic Survey (Jan 31) is expected to peg growth at ~7.3–7.4%, setting the tone ahead of the rare Sunday Budget presentation.