Budget 2026 Expectations: FM Sitharaman's Sunday Budget Amid Global Trade Tensions

Finance Minister Nirmala Sitharaman is set to present the Union Budget 2026 on February 1, 2026, marking a historic first as it will be delivered on a Sunday. This budget represents the second full-year financial plan of the Narendra Modi 3.0 government, arriving at a critical juncture of global economic uncertainty.

Global Context and Domestic Priorities

The budget comes amidst escalating trade tensions triggered by US President Donald Trump's tariff policies, creating significant external headwinds for the Indian economy. Experts emphasize that the government must prioritize domestic economic resilience and export competitiveness to shield against these global pressures. Defence expenditure is also under heightened focus due to ongoing border tensions, with calls for increased capital allocation in this sector.

Taxpayer Expectations and Industry Demands

Individual taxpayers are eagerly anticipating potential income tax relief and simplified compliance procedures. However, following last year's major overhaul of the new income tax regime, significant changes appear unlikely according to most tax experts.

Industry leaders have presented diverse expectations for Budget 2026:

Small Business Support: Rajneesh Chopra of Amway India advocates for lower income tax slabs for small businesses and direct sellers to foster grassroots entrepreneurship.
Agricultural Resilience: Dr. Arun Raste of NCDEX emphasizes strengthening farm resilience through higher R&D allocations and rationalizing Commodity Transaction Tax.
Education and Skilling: Multiple experts including Pravesh Dudani and Atul Temurnikar stress the need for targeted financial allocations to improve educational outcomes and workforce readiness.
EV Sector Alignment: Kunal Mundra of Astranova Mobility calls for uniform 5% GST across electric vehicles and components to boost adoption.
Financial Security: Sumit Madan of Axis Max Life Insurance proposes a separate tax deduction for pure term insurance to address India's protection gap.

Structural Reforms and Sector-Specific Recommendations

The budget is expected to address several structural issues across key sectors:

Manufacturing Boost: Anil G. Verma of Godrej Enterprises Group highlights the importance of continuing PLI schemes and improving manufacturing competitiveness.
Carbon Market Development: Yashodhan Ramteke of EcoGuard Global emphasizes building robust carbon market infrastructure for global integration.
NBFC Recognition: George Alexander Muthoot and Mathew Muthoottu advocate for Priority Sector Lending status for NBFCs to enhance rural credit access.
Tax Rationalization: Sandeep Bhalla discusses balancing TDS/TCS rationalization with revenue protection in the GST era.
M&A Clarity: Vaibhav Gupta outlines necessary tax clarifications for cross-border mergers and employee stock option swaps.

Budget Presentation and Parliamentary Schedule

The Union Budget 2026 will be presented during Parliament's Budget Session, scheduled from January 28 to February 13, 2026, with a second phase resuming in March. This continues the practice established in 2017 of presenting the budget on February 1, replacing the earlier February 28 tradition. The separate Railway Budget presentation was discontinued during this transition.

As India navigates complex global trade dynamics, Budget 2026 is poised to provide crucial direction for economic policy, with particular emphasis on domestic manufacturing, export enhancement, and inclusive growth initiatives across sectors.