The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman on February 1, 2026, continues the government’s emphasis on infrastructure-led growth, self-reliance, and resilience amid global uncertainties, including US tariffs. With a record public capital expenditure of ₹12.2 lakh crore (an increase of about 9% from the previous year), the budget prioritizes modernization across defence, manufacturing, digital infrastructure, and sustainable mobility. The fiscal deficit is targeted at 4.3% of GDP, balancing consolidation with sustained investment.
Key sectoral announcements include a significant hike in defence capital outlay to around ₹2.19 lakh crore (part of a total defence allocation of approximately ₹7.85 lakh crore, up 15%), boosting indigenisation and capability enhancement. In electric mobility, the budget supports the deployment of 4,000 new electric buses under schemes like PM-eBus Sewa and allocates funds under PM E-DRIVE for nationwide EV charging infrastructure. Tax reforms for the IT sector feature a unified framework with a common safe harbour margin of 15.5%, an enhanced threshold to ₹2,000 crore, and automated approvals to reduce compliance burdens. While infrastructure and connectivity push (highways, metros, logistics) drew praise, the absence of targeted measures for affordable housing sparked criticism from real estate bodies.
Industry leaders from defence, cybersecurity, electric mobility, real estate, and IT services have responded positively to the strategic focus, while highlighting areas for further attention.
Ankur Shah, Managing Director of Krishna Defence and Allied Industries Limited, welcomed the defence push: “While global developments such as US tariffs are being closely observed, the government is signalling that India is ready to think beyond reliance on any single market, expand opportunities in Europe, and improve ease of doing business. The Union Budget 2026–27’s announcement of a significant increase in defence capital expenditure to ₹2.3 lakh crore underscores a strong commitment to modernisation, self-reliance, and indigenisation. For domestic manufacturers, this presents a strategic opportunity to scale production, invest in advanced R&D, and develop mission-critical technologies. With domestic manufacturing capacity projected to grow 7%, India is not only reducing import dependency but also enhancing its defence readiness. At Krishna Defence, we view this renewed focus on embedding defence manufacturing into India’s broader industrial ecosystem as a pivotal moment. It positions us to deliver resilient, homegrown solutions that strengthen national security, foster technological innovation, and elevate India’s standing as a globally competitive defence manufacturer.”
Deep Chanda, CEO of Ampcus Cyber, emphasized cybersecurity’s growing role: “The Union Budget 2026 lays a strong foundation for India’s next phase of digital and industrial growth. While global developments such as US tariffs are being monitored, the government is signaling that India is prepared to think beyond dependency on any single market, expanding opportunities in Europe, and improving ease of doing business. Initiatives across healthcare, semiconductor manufacturing under the GaN-focused Semiconductor 2.0 plan, and the expansion of Digital Public Infrastructure (DPI) into agriculture, compliance, taxation, infrastructure, and healthcare reflect India’s intent to build globally competitive and resilient ecosystems. With this rapid digital and industrial growth, cybersecurity is no longer optional but essential, creating an urgent need for enterprises to adopt advanced solutions to protect critical data and enable trusted, scalable growth.”
Hari Krishna, Founder & CEO of Green Drive Mobility, highlighted the green mobility thrust: “India’s shift towards India’s push for electric mobility, with the government focusing on electric mobility with a specific focus on public transportation and sustainable last-mile delivery. The PM-eBus Sewa scheme will deploy 4,000 new electric buses, complemented by ₹2,000 crore under the PM E-DRIVE scheme for pan-India EV charging infrastructure, accelerating clean transport adoption. For last-mile delivery, this opens opportunities to electrify logistics fleets, reduce emissions, and enhance operational efficiency. At Green Drive, we see this industry’s expectations for 38,000 e-buses by 2029; the government’s continued policy support provides the clarity and stability needed to drive India’s green mobility transition.”
In the real estate sector, Shekhar Patel, President of CREDAI National, offered a mixed assessment: “CREDAI welcomes the government’s continued focus on infrastructure spending, which is a big positive for the real estate sector. Investments in highways, metros, logistics corridors, railways, and urban infrastructure will improve connectivity, unlock new growth corridors, and support long-term urban development. CREDAI also appreciates the emphasis on ease of doing business. Faster approvals, simplified processes, and greater digitisation can significantly reduce project timelines and holding costs, ultimately benefiting both developers and homebuyers. However, CREDAI is deeply disappointed that the Budget offers nothing concrete for affordable housing. With the current outdated definition of affordable housing, CREDAI estimates that the segment’s share could decline further from 18% to nearly 12% of total housing supply. This is a serious warning sign for India’s lower middle class and middle class. CREDAI believes that affordable housing is not a welfare scheme it is economic infrastructure. It is a major driver of employment, consumption, and social stability. Rising construction costs and land prices, without corresponding policy support, are pushing developers away from this segment. If affordable housing supply continues to weaken, the consequences are clear: higher rentals, longer commutes, and growth of informal housing. CREDAI urges the government to give urgent policy attention to affordable housing to ensure inclusive and sustainable urban growth.”
Monica Pirgal, CEO of Bhartiya Converge, praised the IT reforms: “By unifying IT services, easing safe harbour norms, and decisively rewarding scale, the government has removed the core friction points that global enterprises faced while expanding in India. The move to a single IT Services framework and predictable margins replaces years of classification ambiguity and tax uncertainty with clarity and confidence. Most notably, raising the safe harbour threshold to ₹2,000 crore signals a powerful shift scale is no longer penalised but actively encouraged. Combined with automated approvals, long-term incentives for cloud and data infrastructure, and a renewed focus on services-led employment and skills, India is no longer competing only on cost. It is positioning itself as the most predictable, scalable, and future-ready global operations hub for enterprises building long-term value.”
The budget reinforces India’s trajectory toward self-reliant, inclusive, and sustainable growth, with strong backing for strategic sectors like defence and green mobility, while addressing digital and infrastructure needs. Industry reactions reflect optimism in execution opportunities alongside calls for targeted interventions in underserved areas like affordable housing.
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