As India charts its course towards sustained economic prosperity, all eyes are turning towards the Union Budget 2026. With a resounding mandate for continued growth, industry leaders and citizens alike are anticipating a budget that emphasizes execution, efficiency, and empowerment. The core expectation is a strategic roadmap that not only introduces new policies but ensures the swift and effective implementation of existing ones. Key sectors like housing, Micro, Small, and Medium Enterprises (MSMEs), and the burgeoning startup ecosystem are at the forefront of these expectations, alongside a collective call for simplified regulations and a major push for digital services.
Fostering Growth Through Execution and Regulatory Clarity
A recurring theme in the prelude to the budget is the demand for “execution efficiency.” While India has a robust framework of policies, industry experts argue that their full potential is often hindered by delays in implementation and regulatory bottlenecks. The upcoming budget is seen as a critical opportunity to address these challenges.
Industry bodies are advocating for a stable, predictable, and transparent policy environment. This includes simplifying compliance procedures, decriminalizing minor economic offenses, and establishing a single-window clearance mechanism for projects across sectors. Such reforms would not only improve the ease of doing business but also attract significant private investment, a crucial engine for growth. The focus is less on revolutionary announcements and more on the diligent execution of well-laid plans to ensure sustainable and inclusive development.
A Renewed Impetus for Affordable and Sustainable Housing
The “Housing for All” mission remains a cornerstone of India’s social and economic agenda. While schemes like the Pradhan Mantri Awas Yojana (PMAY) have made significant strides, the real estate sector is seeking further support in the Union Budget 2026 to maintain momentum.
Key expectations from real estate bodies like CREDAI and NAREDCO include:
- Tax Incentives for Homebuyers: A significant increase in the tax deduction limit for home loan interest under Section 24(b) of the Income Tax Act from the current ₹2 lakh to at least ₹5 lakh. This would boost affordability and stimulate demand, especially in urban and semi-urban areas.
- Redefining Affordable Housing: A revision in the price cap for affordable housing to reflect current market realities in metropolitan cities, allowing more homebuyers to benefit from government schemes and lower GST rates.
- Input Tax Credit (ITC) on GST: Permitting developers to claim ITC on raw materials like cement and steel. This would help in reducing construction costs, and the benefits could be passed on to the customers, making homes more affordable.
- Single-Window Clearance: A time-bound, single-window approval system for real estate projects is a long-standing demand that would drastically cut down project timelines and costs.
By addressing these issues, the budget can create a ripple effect, boosting not only the real estate market but also over 250 ancillary industries, thereby generating massive employment.
Empowering MSMEs: The Backbone of the Indian Economy
MSMEs are crucial to India’s economy, contributing significantly to GDP, exports, and employment. However, they continue to face challenges related to credit access, technological adoption, and a complex compliance environment. The Union Budget 2026 is an opportunity to provide targeted support to this vital sector.
The industry hopes for measures such as simplified credit disbursement processes through government portals, an expansion of the Production-Linked Incentive (PLI) schemes to include more MSME-dominated sectors, and further simplification of GST norms. Enhancing digital literacy and providing financial support for technology upgrades are also critical for making MSMEs more competitive on a global scale. As noted by the Ministry of MSME, a stronger MSME sector is fundamental to achieving self-reliance (Atmanirbhar Bharat) and fostering innovation from the ground up.
Fueling the Startup and Digital Services Revolution
India is the world’s third-largest startup ecosystem, and the Union Budget 2026 is expected to further fuel this engine of innovation. The Startup India initiative has laid a strong foundation, but founders and investors are looking for the next wave of reforms.
Key asks include:
- Simplification of Taxation: This includes clarity and simplification of the “angel tax” provisions and extending the tax holiday period for startups to encourage entrepreneurship.
- Access to Capital: Creating a more robust framework to attract domestic and foreign capital, possibly through a dedicated fund-of-funds for deep-tech and impact startups.
- Boosting Digital Public Infrastructure (DPI): Increased allocation for strengthening India’s world-class DPI, like UPI and ONDC, can create new opportunities for startups to innovate and scale.
A forward-looking budget that promotes research and development, protects intellectual property, and simplifies regulations will be instrumental in helping Indian startups compete globally and build solutions for the future.
Conclusion: A Budget for the Future
The expectations for the Union Budget 2026 converge on a single vision: creating a conducive environment for sustainable, long-term growth. Industry leaders are not just asking for fiscal incentives but for a fundamental shift towards efficient execution, transparent governance, and future-ready policies. By focusing on the critical sectors of housing, MSMEs, and startups, and by committing to clear and stable regulatory reforms, the government can unlock India’s immense potential. A budget that delivers on these fronts will be a budget that truly paves the way for a prosperous and resilient India.
