Delhi, January 30:  Finance Minister Nirmala Sitharaman is set to present the Union Budget for 2026-27 on February 1, marking her ninth consecutive address. As the budget date approaches, a clear divide has emerged between the "wishlist" of the common consumer and the strategic demands of India Inc. While households are grappling with food inflation and stagnant tax slabs, the industry is pushing for aggressive incentives in Artificial Intelligence (AI) and high-tech manufacturing to future-proof the workforce.

The 2026 Budget follows a landmark year in 2025, which saw the new tax regime become the default for millions. This year, experts anticipate a "fine-tuning" approach rather than a radical overhaul, with the government expected to balance fiscal consolidation with targeted relief for the middle class and MSMEs. Union Budget 2026: Know Date, Time and Live Streaming Details.

Budget 2026 Expectations

Consumer Wishlist: Tax Cuts and 'Cheap Veggies'

For the average Indian household, the primary concern remains the rising cost of living. Consumer groups are urging the government to address food inflation, specifically seeking measures to stabilize vegetable prices and essential commodities. On the taxation front, the "salaried class" is hopeful for a significant hike in the standard deduction, with many experts suggesting an increase from INR 75,000 to INR 1 lakh to offset inflationary pressures.

Beyond deductions, there is a growing demand for a review of the 30% tax slab. Currently, the highest tax rate kicks in at INR 24 lakh under the new regime, but taxpayers are hoping for further adjustments to the INR 12–20 lakh bracket. Additionally, investors are eyeing an increase in the LTCG (Long-Term Capital Gains) tax-free limit, potentially raising the threshold to INR 2 lakh to encourage equity participation. MSME Expectations From Union Budget 2026: Higher GST Exemptions and Interest Subsidies, Check Details.

Housing and Infrastructure 

The real estate sector is seeking a critical revision of the definition of "affordable housing." Currently capped at INR 45 lakh, industry leaders argue this figure is outdated in metropolitan markets. A higher cap would allow more homebuyers to access GST benefits and interest subsidies under the Pradhan Mantri Awas Yojana (PMAY).

Homeowners are also calling for higher interest deduction limits on home loans under Section 24(b). In the rental market, there is an expectation for better HRA exemptions for residents in Tier-2 and Tier-3 cities, reflecting the shifting workforce post-pandemic.

Industry Demands: AI Training and Tech Sovereignty

India’s technology sector is pivoting its focus toward AI and deep tech. Industry bodies like NASSCOM have emphasized that AI should no longer be a "side item" but a core budgetary pillar. The wishlist includes special tax incentives for R&D in AI and robotics, alongside subsidies for the high electricity and hardware costs required to run massive data centers.

Furthermore, there is a strong push for a "human capital" focus. Tech leaders are calling for the government to fund AI skilling through apprenticeships and vocational training. By treating AI literacy as a public good, the industry believes India can transform its demographic dividend into a global competitive advantage in platform engineering and data security.

Job Creation and the 'IndiaAI Mission'

With an eye on employment, the industry is looking for an expansion of the IndiaAI Mission, currently budgeted at roughly INR 2,000 crore annually. Stakeholders argue this should be increased to support a "compute credit" scheme, helping startups access expensive AI chips and infrastructure.

The goal is to move India from being an AI "consumer" to an AI "creator." By aligning policy with job-relevant capabilities, such as AI-enabled logistics and healthcare administration, the 2026 Budget could serve as the catalyst for the next wave of high-value job creation in the private sector.

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(The above story first appeared on LatestLY on Jan 30, 2026 05:10 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).