Five Important Things to Track in India’s 2026 Budget

Five Important Things to Track in India’s 2026 Budget

Finance Minister Nirmala Sitharaman will present the Union Budget on February 1, 2026. Presenting the budget is one of the most important events for a country because it explains how the government plans to earn and spend money in the coming year.

With major changes happening in the global economy. People are excited to understand which sectors the government will prioritise and how it plans to boost economic growth.

Five important things to keep an eye on this year

Fiscal deficit

A fiscal deficit occurs when a government’s total expenditures exceed its total revenue (excluding money from borrowings) during a specific period, usually a fiscal year. This gap shows the total amount the government needs to borrow to meet its financial obligations.

The fiscal deficit reduce to 4.8% in FY25 which shows better control over spending and finances, and the plan to reduce it further in FY26 reflects continued improvement. However, for FY26, the government plans to reduce this further to 4.4%.

GDP Growth Target

Investors in the financial markets will watch the GDP growth target for FY27. For the Union Budget 2026, India’s real GDP growth prediction was set at 7.4% for FY 2025-26, up from 6.5% in FY 2024-25.

 Capital Expenditure (Capex)

The government’s capital expenditure (Capex) in India’s Union Budget focuses on building long-term assets such as roads, railways, bridges, and energy projects. These investments are designed to help the economy grow over a long time by creating jobs, improving roads and transport, and making it easier for businesses to do their work. In recent budgets, the government has steadily increased spending on such projects.

Atmanirbhar Bharat

The government should concentrate on building real strength in key areas like defence, semiconductors, electronics, and energy within the country, says expert. This means creating factories, skills, and supply chains at home, instead of focusing on small trial projects or making big policy announcements that don’t lead to real change.

India should not depend heavily on other countries for weapons, equipment, or critical technology. It’s not just about improving the weapons we already have but also about using modern tools like artificial intelligence to build smarter, more advanced defence systems from scratch.

Personal Income Tax Slabs

Everyone whether salaried people, business owners, or companies, keenly waits for the Budget to see if taxes will go down or increase. However, experts feel that this time the Finance Minister may not make any major changes to the existing tax system.

In the 2025 Budget, the government recognised the importance of the middle class and provided major tax relief under the simplified tax regime. Earlier, people earning up to Rs 7 lakh did not have to pay any income tax, but this limit has now been increased to Rs 12 lakh, meaning more people will pay zero tax. Also, the income slabs have been revised.

The government has changed the income tax slabs. Earlier, the highest tax rate of 30% applied to people earning more than Rs 15 lakhs. Now, this highest tax rate will apply only if income goes above Rs 24 lakhs.