Union Budget 2026: Expectations survey report

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Grant Thornton Bharat's pre-budget survey report shows that this is a year when policy direction matters as much as incremental changes. The Budget comes at a time when businesses are facing global uncertainty and shifting trade relationships. With India’s fiscal deficit heading toward about 4.4% of GDP, the industry is seeking fiscal discipline without slowing momentum in infrastructure, investment, or competitiveness.

Across tax, trade and customs, the survey points to a consistent theme: businesses are seeking greater clarity and predictability. Whether it is the transition to a new Income-tax Act, GST administration or digital integration in customs, the emphasis is on stable frameworks, smoother implementation and reduced compliances. On the personal taxation front, despite the overhaul of slab rates under the new tax regime carried outlast year, it seems that demand for further tweaks continues to top taxpayer’s wishlist.

Richa Sawhney Partner, Tax, Grant Thornton Bharat

Sustaining growth through fiscal discipline and innovation

Growth and fiscal strategy

Respondents support a calibrated fiscal approach, with continued backing for growth-oriented public spending even as fiscal consolidation continues. This reflects a shared view across the industry that sustained public investment plays an important role in maintaining economic momentum and encouraging private capital, especially given a slowing global economy.

Innovation and R&D

The survey points to a preference for practical, incentive-driven support for innovation. Sector-specific innovation funds and weighted tax deductions for R&D stand out as the most important measures, underlining the value industry places on support that directly reduces the cost and risk of research and product development. Public–private partnerships in research also receive strong backing, suggesting interest in collaboration once the core incentives are in place.

Policy certainty drives long-term infrastructure investment

Driving infrastructure investment

Survey findings indicate that long-term infrastructure investment is influenced more by policy certainty than by incremental incentives. A predictable tax framework for InvITs, REITs and infrastructure bonds is critical to attracting long-term capital into infrastructure. The survey also points to the importance of clarity around PPP and hybrid project structures, as well as more streamlined cross-border funding approvals.

Priority areas for infrastructure development

Renewable energy and storage top the list of priorities, reflecting India’s ongoing transition toward cleaner and more resilient energy systems. Urban infrastructure and transport remain important areas of focus, driven by ongoing urbanisation and mobility requirements. Digital and telecom connectivity ranks lower relative to other sectors, suggesting that near-term infrastructure attention is more concentrated
on energy and core physical assets.

Execution and ease of doing business in focus

Strengthening project execution

Respondents highlight the need for digitised tracking systems and stronger coordination to improve implementation efficiency and reduce delays. Performance-linked incentives along with better coordination across ministries and agencies are also important areas the government should focus on.

Ease of doing business

Recent Budgets have focused on improving the ease of doing business, with this year’s expectations centred on simplified compliance, streamlined licensing, and time-bound service delivery to reduce red tape. While steps to lower tax uncertainty and expand dispute resolution are seen as useful, businesses see upfront regulatory clarity and process efficiency as more immediate priorities.

Customs and export reforms to support manufacturing

Trade policy priorities

A simpler and more predictable export-incentive framework is the top priority for exporters. Closing free trade agreements with key partners follows next, underlining the importance of easier access to overseas markets. Logistics, trade facilitation and digital systems matter, but are seen as secondary to clear incentives and trade agreements.

Customs measures for competitiveness

Customs measures directly influence manufacturing competitiveness by determining the cost and predictability of cross-border trade. Alignment with global standards reduces friction and uncertainty at borders, while lower duties on manufacturing inputs support scale in globally integrated manufacturing.

Managing the transition to the New Income Tax regime

Transition to the New Income Tax Act

The transition to the New Income Tax Act affects several business systems, including accounting and payroll, as well compliance workflows. Businesses are therefore focused on minimising disruption and compliance risk during the shift. Extended timelines, early guidance and structured support are seen as important to allow organisations to adapt processes in an orderly manner rather than through reactive compliance.

Enhancing the New Tax regime

The attractiveness of the new tax regime hinges on its impact on take-home pay and ease of adoption. Lower rates or wider slabs are seen as the most direct way to improve outcomes for salaried taxpayers, while need of limited deductions and progressive standard There is lower emphasis on need of simplification in process of regime switching.

Momentum builds for API-driven customs systems

GST reforms

Survey responses point to the input tax credit as the central focus of GST reforms. Simplification of credit rules and a more stable rate structure are the primary expectations, reflecting ongoing concerns about compliance complexity and uncertainty.
Faster dispute-resolution mechanisms and sector-specific clarifications are seen as important but secondary, indicating that stability and ease of credit utilisation remain the priorities under the GST framework.

Digital integration in customs

The survey suggests growing readiness among businesses to adopt API-based customs systems, with a significant share indicating preparedness or near-readiness. At the same time, the responses highlight a need for well-defined standards and stronger supporting infrastructure to enable effective integration.

Funding and incentives for early-stage and MSME growth

MSME competitiveness

Access to affordable working capital is the top priority, with MSMEs also seeking support to improve export readiness. Support for export readiness and incentives for supply-chain adoption will also help improve competitiveness.

Strengthening the start-up ecosystem

Innovation-linked tax credits and stronger investment incentives are seen as essential to accelerate early-stage growth. Tax incentives, ESOPs and faster exit mechanisms will also help improve the start-up ecosystem.

Tax credits driving green investment and low-carbon R&D

Clean-energy transition

India aims for 500 GW of non-fossil fuel capacity by 2030 and net-zero by 2070. Survey respondents view tax credits for green CAPEX and low-carbon R&D as key measures to accelerate India’s shift to clean energy.

Conclusion

The survey findings indicate a preference for continuity in economic policy. Businesses appear less focused on new announcements and more attentive to the consistency with which policies are implemented over time. In an environment of increasingly selective capital allocation, the Union Budget 2026 is seen as an important signal of India’s economic and policy intent.

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Union Budget 2026