India's Union Budget 2026-27, to be presented on February 1st, is highly anticipated as a pivotal moment for the nation's fiscal and economic policy. Coming at a time of global uncertainty and evolving domestic challenges, the budget is expected to go beyond routine allocations and signal structural reforms to bolster growth, jobs, investment, and consumption. The government's fiscal strategy will likely focus on revenue measures and expenditure priorities, addressing sector-specific challenges while supporting emerging areas like technology, artificial intelligence, and robotics.
The Economic Survey 2025-26, tabled a day before the budget, projects a GDP growth of 6.8%–7.2% for FY27, demonstrating resilient economic momentum despite global headwinds. It emphasizes policy continuity, deeper reforms, and strategic investments to sustain growth and structural transformation. Prime Minister Narendra Modi has indicated that the Economic Survey should guide informed policymaking, suggesting that its recommendations will be reflected in the upcoming budget.
One of the foremost expectations is tax relief for individuals and a simplified personal tax regime. There is anticipation for rationalization of the top tax bracket under the new tax regime.
A key focus of Budget 2026-27 is expected to be on the Technology, AI, and Robotics sector, recognizing its crucial role in driving productivity, innovation, and global competitiveness. Stakeholders anticipate enhanced fiscal incentives for AI-led Research and development, IP creation, and deep-tech innovation. Increased budgetary support is also expected for AI centers of excellence, high-performance computing infrastructure, and public-private research platforms. The sector also seeks regulatory clarity on data governance and responsible AI deployment. Targeted incentives to promote AI and robotics adoption across various sectors, particularly among MSMEs, are also anticipated.
To convert AI potential into economy-wide productivity, growth policy should connect innovation financing to AI priorities such as compute-efficient models, evaluation and safety tooling, and public-good datasets. This will ensure that India's AI ecosystem produces domestic productivity and exportable capabilities.
The budget is expected to reinforce India's commitment to capital expenditure (capex), a strategy aimed at creating jobs and long-term productive assets. Analysts predict a potential 10–15% increase in overall capex, focusing on critical sectors like logistics, urban infrastructure, renewable energy, digital connectivity, and green technologies. Robust allocations and strategic policy support are expected for highways and the transport sectors, with a focus on roadways, expressways, and transport corridors. Housing and urban development are also likely to receive special attention, with increased allocations for the Pradhan Mantri Awas Yojana (PMAY) program.
MSMEs will likely remain a central focus, with emphasis on financing, innovation, and inclusion. Agriculture is also expected to remain a priority, with increased allocations for agricultural R&D, climate-resilient seeds, and storage and processing infrastructure. Promotion of digital agriculture technologies to support higher productivity and strengthening export competitiveness for agricultural commodities are also anticipated.
The Planning Institute of Australia (PIA) has released its pre-Budget submission, outlining five priorities for the 2026–27 Federal Budget, focusing on practical investments that strengthen housing delivery, improve infrastructure coordination, reduce disaster costs, and address workforce capacity constraints. These priorities include a Future Homes Planning Fund, clear national guidance on planning for housing, better national planning and housing data, and updated flood modelling and mapping.
Overall, Budget 2026-27 is expected to prioritize policies that boost jobs, productivity, and resilience through strategic investments in infrastructure, technology, and human capital.
