Union Budget Outlook Across Key Sectors

As India prepares for the Union Budget on February 1, policymakers, businesses, and investors are assessing how the government balances growth priorities with fiscal discipline. Recent budgets have focused on capital expenditure, reforms, and policy continuity, and similar themes are expected to guide this year’s announcements.

Infrastructure and Capital Expenditure: With ₹11.21 lakh crore allocated to capital expenditure in the previous budget, infrastructure has remained a core growth driver. The upcoming budget is expected to focus more on execution, faster completion of projects, and improving logistics efficiency rather than launching large new schemes.

Manufacturing: Manufacturing remains central to India’s growth strategy, supported by continued allocations and Production-Linked Incentive (PLI) schemes. Expectations include policy continuity, smoother implementation, and better integration of MSMEs into supply chains.

Banking and Financial Services: The banking sector enters the budget on strong footing, with lower NPAs and steady credit growth. The focus is likely to remain on maintaining credit flow to productive sectors without major recapitalisation measures.

Capital Markets: With rising retail participation and strong mutual fund inflows, markets are expected to seek stability in capital gains taxation and regulatory policies rather than disruptive changes.

MSMEs: MSMEs continue to play a vital role in employment and exports. Expectations include improved access to credit, stronger guarantee support, and incentives for technology adoption and competitiveness.

Agriculture and Rural Economy: Agriculture is expected to see policy continuity, with emphasis on productivity, irrigation, income support, and rural infrastructure rather than major structural changes.

Healthcare: With healthcare allocations rising in recent years, the focus is expected to remain on strengthening public health infrastructure, primary care, and affordability.

Education and Skill Development: Education and skilling are likely to remain priorities, with emphasis on quality, access, digital learning, and employability aligned with India’s demographic advantage.

Energy and Renewables: Rising power demand and clean energy targets are expected to drive continued support for both conventional power and renewable energy expansion.

Technology and Digital Economy: Digital public infrastructure and technology-led growth are expected to see continued policy support, with focus on consolidation, cybersecurity, and innovation.

Defence: Defence spending is expected to remain a priority, with continued emphasis on modernisation and domestic manufacturing.

Overall Outlook: The Union Budget is widely expected to prioritise stability, execution, and long-term growth across sectors, reinforcing confidence among investors and businesses.