Union Budget 2026–27: Industry Leaders React to India’s Growth Path

On February 1, 2026, Finance Minister Nirmala Sitharaman unveiled the Union Budget 2026–27, setting the stage for India’s next phase of growth. With record public capital expenditure, a focus on infrastructure, manufacturing, AI, youth, and women-led enterprises, and initiatives spanning agriculture to biotechnology, the budget is being hailed by industry leaders as a blueprint for a future-ready, globally competitive India. From real estate to Tier-2 MSMEs and traditional food brands, businesses see opportunities to scale, innovate, and strengthen India’s economic foundation.

Pre-Budget Expectations

Ahead of the Budget, expectations centred around accelerating India’s domestic manufacturing capabilities, strengthening rural and MSME sectors, boosting infrastructure investment, and increasing allocations for education, health, and technology. Stakeholders anticipated measures to enhance skilling, digital adoption, and ease of doing business, alongside targeted initiatives for women-led enterprises, tourism, and sustainable agriculture.

Personal Finance and Tax Updates

The Union Budget 2026–27 maintained the existing income tax slabs for both the old and new regimes, keeping basic rates and exemptions unchanged. The Budget also introduced the new Income Tax Act, 2025, effective April 1 2026, aimed at simplifying the law with clearer rules and digital‑first compliance, and extended deadlines to file or revise ITRs.

Investors continue to benefit from Sovereign Gold Bonds (SGBs), which offer capital gains exemption on redemption, while capital gains tax rates for equities, debt, and property remain unchanged. The Securities Transaction Tax (STT) on derivatives has been adjusted, and Tax Collected at Source (TCS) rules for foreign remittances and overseas travel have been rationalized: 5% TCS on remittances up to Rs. 10 lakh and 20% above Rs. 10 lakh.

These measures aim to streamline compliance, improve transparency, and maintain stability for taxpayers and investors.

Infrastructure and Urban Development

The government announced a record public capital expenditure of Rs. 12.2 lakh crore, reflecting a long-term commitment to urban and regional infrastructure. Experts suggested this could strengthen Mumbai’s and other metropolitan real estate markets while boosting opportunities across residential, commercial, and industrial sectors.

Talking about the effect on infrastructure, Dhuleva Group's Director Anuj Mehta stated, "The core fundamentals of Mumbai’s real estate market will be strengthened by Budget 2026–27 through the prioritisation of creating urban capacity for the long-term, as opposed to short-term measures. Continued increases in public capital expenditures alongside the implementation of the City Economic Regions framework will create greater infrastructure depth throughout the Mumbai Metropolitan Region and reinforce the demand for residential and commercial properties in well-located micro-markets."

Viceroy Properties Founder & CEO Cyrus Mody highlighted the certainty capital expenditure could bring to urban projects. "Through Budget 2026-27, a capital-expenditure-driven growth strategy will be implemented. Public capital expenditure is expected to increase to Rs. 12.2 lakh crore, allowing for long-term execution certainty for the infrastructure pipeline in Mumbai. The focus on providing financing enhances the contribution of the City Economic Regions while enhancing both connectivity and depth of infrastructure across suburban growth nodes, thereby solidifying Mumbai's position as the anchor of the larger Mumbai Metropolitan Region."

From the construction perspective, Atul Projects Managing Director Aakash Patel noted, "Mumbai’s real estate market will benefit from infrastructure investment as part of India's budget. Since FY2014-15, the public capital outlay has grown from Rs. 2 lakh crore to Rs. 11.2 lakh crore with a proposal of an additional Rs. 12.2 lakh crore for FY2026-27, establishing long-term certainty and confidence in the development of cities."

Defence

The government has set aside Rs 7.8 lakh crore for the Defence Ministry, marking a notable increase from last year. Of this, around Rs 2.19 lakh crore is earmarked for capital expenditure, aimed at modernising equipment, boosting capabilities, and supporting key defence projects across the armed forces.

Manufacturing, Technology, and Consumer Sectors

Budget measures in manufacturing, technology, and electronics drew attention, including India Semiconductor Mission 2.0, an enhanced Rs. 40,000 crore outlay for electronics components, and support for MSMEs and SMEs.

Discussing implications for consumer durables, Voltas Ltd. MD Mukundan Menon said, "The Budget’s strategic push on manufacturing and technology is especially significant for the consumer durables sector. Initiatives such as the India Semiconductor Mission 2.0 and the enhanced Rs. 40,000 crore outlay for electronics component manufacturing will meaningfully deepen domestic value addition. These measures not only improve affordability for consumers but also elevate India’s competitiveness in global value chains."

Pidilite Industries MD Sudhanshu Vats emphasised the importance of domestic manufacturing. "The continued focus on domestic manufacturing across chemicals, electronics and capital goods strengthens supply-chain resilience and supports India’s ambition to be a globally competitive production hub. With public capex at Rs. 12.2 lakh crore, demand across housing, construction and infrastructure-linked industries will remain robust, directly benefiting the building materials and adhesives ecosystem."

Cycle Pure Agarbathi’s Managing Director Arjun Ranga highlighted SME-focused initiatives. "The Union Budget ‘26 is a masterclass in balancing long-term capacity building with fiscal discipline. Key initiatives like the Rs. 10,000 crore SME Growth Fund, support through the Self-Reliant India Fund, and better liquidity via TReDS directly address challenges in expansion and stability in the sector."

Travel, Tourism, and Hospitality

Travel and tourism received a boost, with allocations for infrastructure, connectivity, digital integration, and heritage-led experiences. Manjari Singhal, Chief Growth and Business Officer at Cleartrip, said, "The Union Budget 2026 signals a clear and consistent commitment to strengthening India’s travel and tourism ecosystem. Continued investments in building an integrated network of roads, railways, airports and emerging connectivity like seaplanes will make travel easier, more accessible and better distributed, supporting the next phase of both domestic and inbound tourism growth."

Alok K Singh, Chairman & CEO of SNVA Traveltech, highlighted improvements for international travelers. "The proposal to revise baggage clearance rules for international travel through enhanced duty-free allowances and clearer norms for temporary carriage of goods addresses long-standing passenger concerns and brings greater transparency and convenience across the travel journey."

Ironhill’s Teja Chekuri pointed to talent development and financing for hospitality. "The focus on structured skill development programmes directly addresses one of the industry’s most persistent challenges of finding and retaining trained talent across brewing, service, and operations. Easier access to long-term, lower-cost financing is a real unlock for hospitality brands looking to expand responsibly."

Agriculture, Food, and Rural Economy

Agriculture and allied sectors were central to the budget, with initiatives like Bharat VISTAR, high-value crops, fisheries, animal husbandry, and rural entrepreneurship.

Pranavi Chekuri of FullStack Ventures noted, "The government’s focus on strengthening native crops from coconut, cashew, and cocoa to horticulture and region-specific produce directly impacts farmers, and in turn, brands like ours that depend on resilient, local value chains."

Khetika’s CEO Dr. Prithwi Singh added, "The focus on increasing farmer incomes, strengthening support for small and vulnerable farmers, and investments across reservoirs, fisheries, animal husbandry and high-value crops reflect a long-term, structural approach to agriculture. Initiatives like Bharat VISTAR will improve access to real-time agronomic insights, market information and risk management for farmers."

Akshali Shah from Parag Milk Foods highlighted dairy support, "The Union Budget 2026 recognises dairy as a key driver of farm income stability, nutrition security and rural employment. The announcement of a credit-linked subsidy programme to promote entrepreneurship in animal husbandry, including dairy, is a timely step that will support the growth of organised dairy enterprises and strengthen allied agricultural sectors."

ZOFF Foods’ Akash Agrawalla emphasised MSME support. "The revival of 2,000 industry clusters and the Rs. 10,000-crore MSME Growth Fund are masterstrokes for the manufacturing ecosystem. By integrating platforms like GeM and TReDS, the government is effectively solving the liquidity bottlenecks that often hinder small enterprises."

Education, Skilling, and Youth Empowerment

The Budget prioritises youth, education, and skilling, with Rs. 1.28 lakh crore allocated to higher education, AI-enabled learning, digital infrastructure, and vocational training. Vivek K Singh, CMD of SNVA Veranda, said, "The renewed focus on strengthening higher education through improved academic quality, expanded digital infrastructure, and enhanced research capacity will help Indian students access globally competitive learning environments and accelerate innovation-led growth."

Stuti Ashok Gupta of Amrutam highlighted Ayurveda initiatives, "The announcement of three new All India Institutes for Ayurveda in Union Budget 2026 is a strong and timely step towards institutionalising India’s traditional healthcare systems. This move will not only strengthen education, research, and clinical excellence in Ayurveda, but also help bridge the gap between classical wisdom and modern healthcare delivery."

Arushi Verma of FITPASS noted support for women entrepreneurs. "The announcement of SHE-Marts in Budget 2026 marks a decisive shift in how India thinks about women’s economic participation, from livelihood support to enterprise ownership. Platforms like SHE-Marts can unlock visibility, formalisation, and financial confidence for women entrepreneurs across rural and emerging India."

Healthcare and Pharmaceuticals

Union Health Minister J.P. Nadda highlighted that the healthcare budget for 2026–27 was increased by about 9 per cent to over Rs. 1.05 lakh crore, and noted that health spending has risen by around 176 per cent over the past 12 years, reflecting the government’s stated commitment to making healthcare more accessible to all. Mankind Pharma’s CEO Sheetal Arora highlighted biopharma focus. "The Union Budget makes a clear and timely choice by placing biopharma at the centre of India’s next manufacturing wave. The Bio Pharma Shakti initiative recognises that longevity, quality of life, and affordability will define healthcare outcomes going forward."

The Union Budget 2026–27 also proposed a scheme to help states establish five regional medical hubs that combine medical, educational, and research facilities. The budget also emphasised expanding allied healthcare training, with plans to add 100,000 allied health professionals over five years and train 150,000 caregivers, signalling a broader push to strengthen healthcare workforce and infrastructure.

Along with that, this budget granted import duty exemptions on 17 cancer drugs to reduce treatment costs and improve access for patients, particularly for high‑need therapies. This move is intended to make life‑saving medicines more affordable while easing the financial burden on families undergoing long‑term treatment.

Textiles, Luxury, and MSMEs

This budget boosts the textile sector with a 19% allocation increase to Rs. 5,272 crore. The budget included a new Rs 10,000 crore SME Growth Fund to help India’s small and medium enterprises scale and become more competitive, along with a top‑up of Rs 2,000 crore to the Self‑Reliant India Fund to support micro enterprises. It also proposed reviving legacy industry clusters and tightening trade finance systems by linking GeM with TReDS to improve liquidity and market access for MSMEs.

Shalini Singh Rathore of TZÁR said, "The Union Budget 2026–27 is a landmark moment where the seams of policy and industry finally align. By fuelling our 'Reform Express' with the Rs. 10,000 crore SME Growth Fund and modernizing traditional clusters through the Textile Expansion Scheme, the government is ensuring homegrown labels no longer just compete on cost, but lead on capability."

Sanjay Jain, Group CEO of PDS Ltd, added, "The launch of SAMARTH 2.0 is a positive step towards modernising the skilling ecosystem through deeper collaboration between industry and academic institutions, while enhancing productivity across export-oriented clusters."

The Union Budget 2026–27 sets out a broad framework for India’s economy, combining large-scale public spending with targeted initiatives across infrastructure, manufacturing, agriculture, and skill development. While sectors such as real estate, tourism, consumer goods, and biotechnology see potential opportunities, the budget also reflects ongoing challenges, including managing fiscal discipline, ensuring effective implementation, and translating policy into measurable growth for smaller enterprises and regional economies. The response from industry suggests cautious optimism: there are avenues for expansion and innovation, but outcomes will depend on execution, regulatory clarity, and market uptake. Overall, the budget provides a directional signal for economic priorities and the sectors likely to see attention in the year ahead.