Indian consumers are approaching the Union Budget 2026 with increased caution and pragmatic expectations, according to Kantar's fifth annual India Union Budget Survey, released on January 28, ahead of the budget presentation on February 1. The survey reveals a shift in consumer sentiment, moving from optimism to measured realism, influenced by concerns about economic slowdown, income stability, and global uncertainties.
The Kantar survey indicated that while 70% of Indians felt that the 2025 Union Budget met their expectations, largely due to tax reforms, there's a growing apprehension about the future. Inflation remains a key concern, with 60% of consumers citing it as a challenge in 2026, up from 57% in 2024. Job security has also emerged as a significant worry, with 36% of respondents expressing concerns about potential layoffs and income stability.
This cautious outlook is impacting spending habits. The intent to spend on discretionary items like dining out, shopping, entertainment, and subscriptions has decreased to 55% in 2026, down from 58% in 2024. Similarly, the appetite for high-ticket purchases, including travel, vehicles, and luxury goods, has fallen to 46% from 51% two years prior. Deepender Rana, Managing Director- South Asia, Kantar, stated that this uncertainty directly reflects in restrained consumer spending.
Furthermore, optimism surrounding India's long-term economic goals has softened. The belief that India will achieve its USD 5 trillion economy milestone has shifted from 2027-28 to 2028-29. Over half of the respondents (51%) view global geopolitical conflicts as a threat to economic growth and stability. Views on the impact of US tariffs remain divided, particularly among business owners and the self-employed.
Despite satisfaction with the previous year's income tax reforms, financial security remains a key concern, with strong demand for further tax reforms, especially among middle-class households. Expectations for the upcoming budget include increasing the standard deduction to INR 1 lakh and enhanced Section 80 deductions, including health insurance benefits. Rana emphasized the clear expectation for the government to engage more closely with the middle class and taxpayers through targeted reforms, stronger economic safeguards, and transparent communication.
The survey also highlighted India's ongoing transition towards a cashless digital economy and the increasing adoption of AI. A significant 79% of consumers are reportedly using AI multiple times a week. This rapid adoption is accompanied by rising calls for stronger regulation, upskilling initiatives, and clearer policy direction in the tech space.
