Finance Minister Nirmala Sitharaman is set to make history by presenting her ninth consecutive Union Budget on February 1, marking a rare Sunday sitting of Parliament and a first in independent India's annals. The Budget for fiscal year 2027 (April 2026 to March 2027) is anticipated to chart a course for sustaining India's growth momentum, upholding fiscal discipline, and advancing structural reforms to insulate the economy from escalating global trade frictions, including potential US tariffs.
Paperless Tradition and Symbolic Shift
In line with recent practice, the Budget will be presented in a fully paperless format, continuing a trend established over the past four years. This digital approach underscores the government's commitment to modernisation. Notably, in her maiden Budget in 2019, Sitharaman replaced the colonial-era leather briefcase with a traditional red cloth 'bahi-khata', symbolising a decisive break from past conventions and embracing indigenous symbolism.
Economic Survey Sets the Stage
With the Economic Survey tabled in Parliament on January 29, industry stakeholders and businesses have articulated clear expectations from Budget 2026. Key focus areas include artificial intelligence, infrastructure spending, telecom sector reforms, and bolstering manufacturing support. The Survey itself framed AI not merely as a prestige technology race but as a core economic strategy, advocating for a bottom-up, sector-specific approach built on open and interoperable systems.
AI and Digital Infrastructure in the Spotlight
Technology firms are keenly awaiting Budget 2026–27 to accelerate the development of India's AI ecosystem. Expectations span innovation incentives, digital infrastructure enhancements, and liquidity support to foster AI adoption across diverse sectors. Former Tech Mahindra CEO and AIONOS co-founder CP Gurnani lauded the Economic Survey for brilliantly capturing India's AI momentum. He emphasised that India's path forward involves leveraging engineering prowess to create affordable, human-centric AI solutions that address local challenges before scaling globally, positioning the nation as a leader in meaningful innovation.
Logistics and Digital Transformation
Logistics SaaS firm FarEye anticipates policy support aimed at improving reliability and global competitiveness, with a particular emphasis on autonomous logistics orchestration. Suryansh Jalan, Chief Business Officer at FarEye, highlighted that incentives for applied AI, advanced planning systems, and interoperable digital workflows are crucial for unlocking productivity gains across multimodal networks. He noted that while the logistics sector may generate nearly 10 million jobs by 2027, the focus must pivot towards enhancing productivity and technological readiness.
GlobalLogic views Budget 2026 as a pivotal moment to transition from digital-first to intelligence-first infrastructure. Piyush Jha, VP and Asia-Pacific head at GlobalLogic, pointed out that the next significant opportunity lies in scaling this intelligence into the physical world, integrating advanced technologies into everyday operations.
Semiconductor Sector Seeks Continuity
Semiconductor companies are advocating for Budget 2026 to emphasise continuity, execution certainty, and long-term competitiveness as projects move into the implementation phase. Ashok Chandak, President of the industry body IESA, noted that schemes under the India Semiconductor Mission have demonstrated tangible progress. Key expectations include the continuity and strengthening of ISM 2.0, higher budgetary allocations for approved projects in FY27, and a simplified, time-bound pari-passu disbursement mechanism. Chandak stressed that tax certainty is as vital as financial incentives for sustaining growth in this critical sector.
Telecom Sector Highlights Financial Stress
The Cellular Operators Association of India (COAI) has called for a comprehensive overhaul of the telecom sector's financial framework, particularly concerning spectrum pricing and regulatory levies. Lt Gen (retd) Dr SP Kochhar, Director General of COAI, highlighted the significant issue of exorbitant spectrum prices, which do not yield commensurate revenue. He asserted that telecom should be recognised as the backbone of the economy, necessitating collaborative efforts from the government and industry to ensure its sustainable functioning.
The industry body has also urged a reduction in regulatory levies and a decrease in GST on license and spectrum fees from 18% to 5%. Kochhar argued that such a measure would benefit both the government and the industry by alleviating financial burdens and fostering a more conducive operational environment.
Capital Expenditure and Economic Priorities
Economists anticipate that capital expenditure will remain the cornerstone of Budget 2026, with sustained investments in critical areas such as roads, railways, defence manufacturing, renewable energy, urban infrastructure, and logistics. For FY27, capex growth is expected to continue, albeit at a more measured pace, complemented by continued support for state infrastructure through interest-free loans.
Focus on Jobs, MSMEs, and Green Transition
Job creation is poised to feature prominently in the Budget, with incentives targeted at labour-intensive manufacturing, skilling initiatives, and apprenticeships. Micro, Small, and Medium Enterprises (MSMEs) may see enhanced allocations or expanded credit-guarantee support, while Production Linked Incentive (PLI) schemes could undergo refinements to maximise effectiveness.
On the environmental front, Budget 2026 is expected to reinforce support for renewable energy, green hydrogen, battery storage, and electric mobility. Concurrently, allocations for oil and gas are likely to be maintained to ensure energy security amidst global volatility, balancing green ambitions with pragmatic energy needs.
Challenges and Fiscal Balancing Act
Finance Minister Sitharaman faces the formidable challenge of restoring investor confidence amid uncertainties surrounding India-US trade talks, persistent foreign portfolio outflows, and a record-low rupee. Some analysts speculate that the government might explore adjustments in petrol and diesel excise duties to bolster revenues, potentially offsetting these against earlier retail price cuts to avoid burdening consumers.
With investor sentiment unsettled by global trade uncertainties and a weakening rupee, Sitharaman must navigate the dual imperative of reinstating confidence while preserving fiscal balance. This intricate balancing act renders Budget 2026 one of the most closely monitored fiscal events in recent years, as stakeholders across sectors await decisive policy directions.
