To understand the ‘expectations’ from Budget 2026, imagine a round table with each stakeholder – the middle class, small owners, and large corporations – seated. The middle class looks for stability and a fair balance as costs rise faster than incomes. They want predictability in taxation and fair treatment for compliance. Small business owners seek relief from relentless compliance, not tax concessions. Large corporations prefer stable, predictable rules to incentives. Across the country, the expectations converge into one ask: government, please say, we hear you.
The Middle Class:
The middle class has the longest-lasting emotional memory of the union budget. That’s how it’s been since 1991, when Manmohan Singh opened the floodgates and the country experienced magic. The dismantling of the licence-permit raj had unleashed an unprecedented entrepreneurial spirit that changed India forever. Ever since, bhadralok have been calculating take-home salaries and tax slabs and practising disappointment with ease!
School fees, rent, insurance, medical bills and EMIs rise, despite claims of mild inflation. Ask any homemaker: budgets are tight. Salaried employees pay taxes on the dot, not because they are more honest than others, but because the system does not allow them room to escape. India has a very strict TDS system. That system has become tighter through automation and will become even more stringent with the full-blown arrival of artificial intelligence.
The middle class’s expectations are simple. Widen the tax slabs, scrap the surcharge, and abolish the cess. Let me tell you why. There are too many slabs now, and they complicate planning. Surcharge distorts the real marginal rate. On the one hand, we say the maximum marginal rate is 30 per cent, but it rises due to a surcharge. Either abolish the surcharge or merge it into the tax rate. Cesses, introduced for specific purposes, often outlive their rationale. These are to be used for the specified purpose, but the records suggest otherwise. But more fundamentally, why not be honest with the tax rate and have it higher? If tax thresholds are adjusted automatically with the Consumer Price Index, relief would be incremental, predictable and depoliticised. Once again, the message is simple. The middle class is not asking for favours. It is asking to be heard.
Small Businesses:
Small businesses seek relief, not from taxes, but from compliance fatigue. For most, GST isn’t the simple tax promised. It is a complex web. Operating with few staff and thin margins, businesses struggle with filings, reconciliations and paperwork. They act as middlemen but track credit delays, upload countless returns and provide endless clarifications for no added value. The basic ask: reduce filing, simplify returns and speed refunds. Relief, in this context, is not leniency. It is efficiency.
Corporate India
Large companies do not expect tax cuts, they expect stability. Corporate India has lived through frequent rule changes and retrospective amendments. Long-term investments depend on a quiet confidence that policies will not shift mid-cycle. It now expects policy stability through 2029 with no retrospective changes.
The central question is: Can policy offer stability and alignment amid daily uncertainty? Underemployment is rampant. MSMEs struggle to grow. Microenterprises rarely grow into small ones and small ones seldom grow into medium ones. Agriculture remains structurally vulnerable, stuck in small plots, with high input costs and weak storage. This is not against ambition. It is a request for alignment. This is the India that approaches Budget 2026: not naïvely optimistic, but waiting for a signal that policymaking will build coherence and stability for its next economic phase.
Sectors That Need Surgery
Agriculture remains the backbone of the economy, even as its share of GDP declines. For agriculture to win, monetary allocations must translate into productivity. Investment in irrigation, storage, cold chains and rural credit need clear timelines and accountability. Lay down clear goalposts for 1 year, 3 year and 5 year.
Next up is manufacturing. India wants to become the world’s factory, but the world’s factory cannot be built on expensive capital, erratic power and regulatory uncertainty. Industry needs long-term policies on these.
India is slowly emerging as the healthcare capital for several Asian countries. India needs greater investment in primary care, digital records, rural services and universal adult health insurance. Primary health and primary education are where a government should focus, besides defence, law and order and external affairs. It must get out of everything else, sooner or later. AI, semiconductors, advanced manufacturing, and green tech need a clear plan, not scattered schemes. Startups face uncertainty as regulations constantly shift.
India has a labour issue. Skill centres train millions for roles that don’t exist. Apprenticeships are rare. Employers want experience, the young want opportunity, and the system provides neither. The Budget cannot solve this. But if the state signals that it wants companies to train rather than merely hire, the labour culture will change. Germany and Japan built their economies on such norms. So can India.
India’s MSME universe is another maya. Owners speak about receivables stuck in public-sector pipelines and inspectors who wield the law as leverage. Most MSMEs do not dream of becoming giants. They dream of simply operating without fear or fatigue.
The Long-Term Policy
India is too large and complex to rely on annual budgets for direction. The main argument: An enduring policy vision, not yearly adjustments, must guide economic destiny. For decades, the budget has been the central platform for policy. It made sense in the early years of liberalisation, when every change felt transformative. But today, the speed of technological changes, the demands of global competition, and the scale of domestic expectations demand a decade-long vision. A good budget improves a year. A strong policy improves a generation. Jobs require a ten-year roadmap. It must link skilling, industrial corridors, MSMEs, digitisation, tourism, green energy and labour mobility. Jobs can be created only through consistent policy discipline. Take manufacturing. Its competitiveness depends on policies that survive electoral cycles. These cannot be reversed each February. Regulatory signals must match that reality.
Environmental stress like pollution, heatwaves, water scarcity is already an economic cost. Infrastructure needs financing models that outlast political terms. Highways, metros, ports and logistics networks cannot be dependent on annual capex mood swings. Tax systems need stability measured in years, not months. Trust is the currency of taxation. Stability is its guarantee. This is also why a long-term policy is important for our economy.
Deficits must narrow. Public investment cannot alone drive growth; private enterprise must take the lead. Budget 2026 must prepare the ground for a shift from state-led momentum to enterprise-led expansion. The Finance Minister, Nirmala Sitaraman, will speak for ninety minutes. TV Studios will debate for twelve hours. Markets will react for a day. But the signals sent about stability, coherence and intent will echo longer
