Union Budget 2026: Expectations from Different Sectors

• ₹12 lakh crore expected infrastructure capex with focus on roads, railways, and logistics

• Agriculture support may increase through PM Kisan expansion and rural infrastructure push

• Defence, renewable energy, EVs, and manufacturing likely to see strong allocation growth

With Union Budget 2026 set to be presented on 1 February, expectations across industries are rising. As India targets steady GDP growth of around 7 percent, the upcoming budget is expected to balance fiscal discipline with growth-oriented spending under the broader Viksit Bharat vision.

From manufacturing and agriculture to technology, healthcare, and automobiles, sector-wise budget allocations could shape business sentiment, investment flows, and stock market movements in the coming year. Below is a closer look at budget 2026 expectations sector wise, based on policy signals, expert commentary, and recent Economic Survey trends.

Industry bodies and analysts expect the government to continue prioritising capital expenditure, domestic manufacturing, digital infrastructure, and sustainability. Sector-wise allocations are likely to focus on job creation, export growth, and long-term competitiveness.

The manufacturing sector remains central to India’s growth strategy, and Budget 2026 is expected to strengthen domestic production capacity while improving global competitiveness.

1. Increased investments in infrastructure and production capacity

Higher spending on projects such as Bharatmala and Gram Sadak Yojana Phase IV is expected, along with expansion of PLI 2.0 for textiles, electronics, and metals. MSME-focused credit guarantees could improve liquidity and export potential.

2. Tax reforms and green manufacturing incentives

Simplification of GST for semiconductors and incentives for clean energy adoption may be announced. Green manufacturing credits and green bond issuances could support net-zero goals and reduce production costs.

3. Digital transformation and technology integration

Support for robotics, automation, AI adoption, and data centres may help manufacturers reduce costs and improve efficiency. Technology-led productivity is expected to be a major theme.

Agriculture continues to be a priority, with Budget 2026 expected to focus on farmer income, infrastructure, and technology-led solutions.

1. Support for farmer welfare schemes

An increase in PM Kisan support and expansion of FPO clusters may be considered. There is also speculation around pilot programs related to MSP reforms and crop diversification.

2. Rural infrastructure development

Higher allocations for rural roads, storage, cold chains, and warehousing could reduce post-harvest losses and improve market access for farmers.

3. Technology and innovation in agriculture

Agri-tech initiatives such as drone-based services, AI-led crop insurance, and precision farming tools are expected to receive policy and funding support.

India’s digital economy continues to expand, and Budget 2026 is expected to reinforce this momentum through infrastructure and innovation incentives.

1. Further development of digital infrastructure

Investments in 5G and early-stage 6G development, broadband expansion in Tier 2 and Tier 3 cities, and data centre parks may feature prominently.

2. Tax incentives for startups and R&D

Permanent removal of angel tax, enhanced R&D tax credits, and deep-tech funding could strengthen India’s startup ecosystem and innovation pipeline.

3. Data protection and privacy

Implementation support for the Digital Personal Data Protection framework and cybersecurity funding may help companies comply while maintaining consumer trust.

Healthcare spending is expected to remain a priority, with a focus on accessibility, affordability, and innovation.

1. Health infrastructure upgrade

Expansion of Ayushman Bharat coverage, rural health centres, and medical education infrastructure may receive increased funding.

2. Affordable healthcare and medicines

Strengthening Jan Aushadhi outlets, API manufacturing parks, and disease screening programs could reduce dependence on imports and lower treatment costs.

3. Health-tech and innovation

Telemedicine, AI diagnostics, and digital health platforms are expected to receive incentives to bridge urban and rural healthcare gaps.

The automobile sector is likely to benefit from policies supporting clean mobility and infrastructure expansion.

1. Focus on electric vehicles

Extension of EV subsidies, uniform GST on components, and incentives for battery manufacturing may support wider EV adoption.

2. Road infrastructure improvement

Higher spending on highways, urban mobility projects, and smart traffic systems could boost demand for vehicles and auto components.

Union Budget 2026 is expected to align sector-wise priorities with a fiscal deficit target of around 4.3 percent. Infrastructure, defence, healthcare, and green energy may see double-digit allocation growth, while manufacturing and technology receive policy-led support.

For businesses and investors, tracking the Economic Survey and final budget announcements will be critical to understanding opportunities and risks across sectors. Financial institutions such as Aditya Birla Capital may offer sector-focused investment solutions to help participate in themes emerging from budget 2026 expectations sector wise.