Budget Expectations 2026: PLI Extension, GST Cuts to Drive Growth in Consumer Durables Sector

As India’s start-up ecosystem moves from "design" phase to "execution" phase in 2026, the industry is looking at Budget 2026 to resolve structural bottlenecksstarting with taxation of ESOPs. Founders and investors are closely watching the upcoming Union Budget 2026 for clarity on long-standing ambiguities around Employee Stock Option Plans (ESOPs), which remain a key tool for talent retention and wealth creation in the start-up sector.

Click Here to Read More.

“For consumers, Budget 2026 should expand homeownership by cutting the hidden costs that quietly get passed on to buyers," Samarth Setia, founder, Rezio.ai said.

Introducing time-bound, single-window clearances and rationalising stamp duties can ease these frictions, while enhanced home-loan interest deductions for first-time and middle-income buyers would help soften EMI pressures.

Faster approvals, clearer regulatory norms, and sustained capital spending on urban infrastructure can open up new growth corridors and make a wider range of locations viable for investment and habitation. Finally, online property advertising warrants tighter oversight.

“We extend our sincere gratitude to the Government for the strategic tax reliefs provided to the FMCG sector; these measures have been instrumental in driving a visible recovery and fuelling a robust resurgence in consumer demand across the nation," Rajiv Kumar, vice chairman, DS Group said.

The upcoming Union Budget should sustain a consumption-led approach that improves affordability and broadens market access. The industry is seeking targeted manufacturing incentives to strengthen the Make in India programme, including capital subsidies, concessional land to support rural production and demand, and tax relief through input tax credits. To accelerate FMCG growth, companies are also calling for a comprehensive support framework to help Indian firms expand overseas, navigate regulatory complexity, and build a durable global presence.

"The Budget must focus on predictability and relief that restores confidence rather than short-term incentives alone," Bindu Sharma, founder & creative director, Mavitrra said. Continued stability in indirect taxes, coupled with a rationalised GST structure on gold and precious metals, can make handcrafted jewellery more accessible and improve the sector’s export potential, she added.

There is a clear industry call for procedural reforms at customs and duty rationalisation on cut and polished diamonds that support both organised retail and artisan-led craftsmanship. Simplifying compliance and reducing costs will help smaller designers and workshops invest in skill development and design innovation.

“The forthcoming budget should focus on policies that advance digital transformation for consumer brands and retail ecosystems. This will benefit the industry, as AI-powered loyalty platforms, real-time supply-chain traceability, and anti-counterfeiting solutions will receive increased support," said Ayush Jhawar, Founder and CEO of Genefied.

He added that tax incentives, easier access to R&D funding, and regulatory frameworks that support QR-based product authentication should also be given additional incentives to spur growth in both general trade and modern retail.

"Budget allocations and initiatives related to the real estate industry, such as affordable housing, housing loan tax, and reduced and refined GST, will accelerate and aid this healthy growth pattern and trajectory," said Pawan Sharma, Managing Director, TRG Group.

"There is a strong need for policies that support deep tech and B2B SaaS companies, which are solving real operational challenges across sales, customer engagement and enterprise efficiency. Simplified compliance norms, rationalisation of GST on software services and targeted tax benefits for companies investing in indigenous IP will significantly ease scale up journeys," said Tushar Dhawan, Partner at Plus91Labs.

“If the objective is Insurance for All by 2047, regulation must now enable scale. A move to perpetual licensing for insurance brokers, green-channel approvals for routine governance changes, and rationalised brokerage across banca and motor channels aligned with EOM guidelines will materially ease doing business," said Rahul Meena Mishra , Director, Hudson Insurance brokers.

 Ahead of the FY27 Budget, agriculture industry leaders and experts are making a strong pitch for increased investments in digital infrastructure, climate-resilient farming practices, and technology adoption to transform a sector that employs nearly half the country's workforce but contributes less than a fifth to national output.

Read more here

"My hope with this budget is for subsidy to be extended for another 50 Lac to 1 Crore homes but this time for solar paired with batteries. This will not just be transformative in making India energy independent but also help our nation move away from free electricity politics, paving way for a more sustainable solution where people "make their own free electricity" rather than relying on govt to give them free electricity," Shreya Mishra, chief executive officer, SolarSquare said.

This would not only be a major step towards India’s energy self-reliance but could also reduce dependence on free electricity subsidies, encouraging a more sustainable model where households generate their own power rather than relying on government-provided electricity, she added.

"Sustained and forward-looking policy support for semiconductors and high-end electronic components is critical towards reducing India’s import dependence - strengthening the domestic ecosystem and enhancing our global competitiveness," Arijeet Talapatra, chief executive officer, itel India said.

With industry efforts underway to localize key components manufacturing under the ECMS policy, focused fiscal support can help build resilient and stable domestic supply chains aligned with the Government’s vision of making a Viksit and Atmanirbhar Bharat. A dedicated push for innovation through investment schemes and R&D linked incentives will go a long way towards enabling tech brands to design next-generation devices, he added.

Rajesh Sharma, Managing Director, Capri Global, stated that Non-Banking Financial Companies are expected to play a critical role in extending last-mile credit, sustaining consumption and supporting economic stability in Union Budget 2026–27, particularly across underserved segments.

“Strengthening MSME credit penetration through policy support and credit-enabling frameworks will be key to unlocking its full potential,” he said.

Sharma also highlighted the need for continued focus on affordable housing through housing finance, interest subsidies and infrastructure-led development to drive inclusive, broad-based economic growth.

Vijendra Singh, President, All India Distillers’ Association (AIDA), said that the ethanol and distillery sector has reached a pivotal stage after achieving the 20% blending target and Budget 2026–27 must now focus on demand expansion.

“The next phase must be driven by predictable demand through a stable, transparent, multi-year pricing and procurement framework,” he said.

He believes that a clear roadmap for E30 blending, incentives for ethanol-compatible vehicles and policy support for SAF, and advanced blending applications will be crucial to sustain investments and protect farmer interests.

Nikunj Saraf, CEO, Choice Wealth, said the Union Budget 2026–27 must strike a careful balance between sustaining growth and maintaining fiscal discipline.

“With strong GDP momentum and controlled inflation, the government has a unique opportunity to support capital expenditure, MSME growth and new-age sectors such as AI, digital infrastructure and clean tech,” he said.

Saraf added that tax simplification and targeted relief for the middle class and entrepreneurs can spur consumption, broaden the tax base and boost long-term investment, strengthening investor confidence and inclusive growth.

Anil Rawal, MD & CEO, IntelliSmart Infrastructure, said that India’s smart meter Advanced Metering Infrastructure (AMI) should be formally recognised under the 'Harmonized Master List of Infrastructure'.

“Smart meters are catalysts for India's digital transformation journey towards the $5trn economy,” he added.

Rawal further stated that AMI is now the digital backbone of electricity distribution, enabling loss reduction, renewable integration, demand-side management and consumer-centric services. Formal recognition would unlock long-term capital, remove regulatory ambiguities, accelerate RDSS implementation and strengthen India’s transition to a sustainable, data-driven power ecosystem.

Suhas Donthi, CEO, Emmvee Photovoltaic Power Limited, stated that while Budget 2025 strongly supported residential solar deployment, the upcoming Budget should further strengthen structural enablers for long-term scale.

“Areas such as manufacturing depth, grid readiness and access to affordable financing for manufacturing will be increasingly critical and merit greater attention going forward,” he said.

Donthi added that sustained support for R&D in solar technologies and ecosystem-level investments will be key to reaching India’s 500 GW solar target by 2030 and building global competitiveness.

DV Manjunatha, Founder and CMD, Emmvee Photovoltaic Power Limited, said the solar PV module and cell manufacturing sector could gain significantly if the upcoming Union Budget reintroduces 80% depreciation for new manufacturing facilities.

“Faster depreciation reduces the real cost of setting up factories and makes it easier to invest in critical upstream areas such as components, materials, tooling and advanced manufacturing capabilities,” he added.

Manjunatha noted that such incentives are vital for capital-intensive solar manufacturing, strengthening domestic supply chains, reducing imports, and supporting India’s Make in India initiative amid high input costs and interest rates.

Saroj Mahapatra, Executive Director of PRADAN, said Budget 2026 should focus on strengthening Farmer Producer Organisations through a cluster-based approach to address challenges such as fragmented landholdings and weak market linkages. He stressed that beyond increasing their numbers, FPOs need better access to professional management, working capital, market intelligence and post-harvest infrastructure. Mahapatra also highlighted the role of Self-Help Groups and village-level institutions under NRLM in anchoring FPOs and improving farmer participation and income stability.

Amit Kumar Tyagi, CEO of TrueReach AI, said the Union Budget should treat AI as critical national infrastructure and help India move from being an AI user to a global innovation hub. "To bridge the R&D gap—where India’s 0.7% GDP spend lags the 1.93% global average—we urge the restoration of the 200% weighted deduction for R&D. This is vital for deep-tech startups facing long-gestation cycles," Tyagi added.

He also stressed for easier access to affordable computing hardware, and faster rollout of the Deep Tech Fund to support long-term innovation. Additionally, Tyagi called out the need for better data platforms, talent upskilling incentives and simpler compliance rules to help Indian AI startups scale globally.

Umesh Revankar, Executive Vice Chairman of Shriram Finance, said the upcoming Union Budget should prioritise effective implementation of India’s growth plans, especially timely execution of large infrastructure projects to boost productivity in logistics and connectivity.

“With large infrastructure projects already identified, timely execution, smoother coordination, and reduced approval friction will be key to ensuring that spending translates into durable assets,” he said.

Revankar added that the NBFC sector is seeking incremental policy measures to improve funding efficiency and MSME credit access, particularly in semi-urban and rural areas, while maintaining responsible lending standards.

Rishabh Goel, Co-founder and CEO of Credgenics, said the rapid growth in retail credit has also led to rising delinquencies, especially in unsecured loans, making technology-driven recovery models increasingly important. “This makes digital, compliant, and data-led debt collection a critical enabler of credit discipline rather than a post-facto activity,” Goel said.

He added that the fintech sector expects Budget 2026 to recognise digital debt resolution platforms as essential infrastructure and provide clearer tax treatment, simpler compliance and incentives to support sustainable credit expansion.

"Interestingly, India’s GDP growth, and performance across other macro-economic indicators, has exceeded projections, but the sustained Viksit Bharat mission warrants that India further steps up investments on research & innovation, physical & digital infrastructure, on indigenous capabilities, skills and global competitiveness to fully harness our demographic leverage.  Next generation factor reforms – land, labour, capital & energy - will be fundamental to delivering the sustained 8%+ growth that India needs. Operating truly as a single market requires deeper alignment between central and state imperatives. One of the suggestions is creation of ‘GST-like Council’ to seamlessly implement some the factor reforms to create ease of doing business and economic momentum across the length & breadth of the country,” said Kamal Bali, President and Managing Director from Volvo Group India.

"India’s IT hiring is moving from volume to value, with growing demand for specialised roles in AI, data platforms, cloud security and product engineering. In the upcoming budget, I would expect attention on building digital infrastructure, AI ecosystems and cloud platforms, alongside focused skills, specially in Tier-2 & Tier 3 cities. A strong push on AI, data infrastructure, R&D and digital upskilling can turn technology investments into real jobs and productivity gains. Support for deep-tech startups, stronger research ecosystems, simpler digital labour compliance and an expanded EPFO wage ceiling will together help create sustainable, high-value tech jobs and position India for long-term global leadership," said Neeti Sharma, CEO, TeamLease Digital

"The Union Budget 2026 is expected to focus on boosting India’s AI infrastructure with a strong emphasis on data centre development. Here are a few potential areas which need attention. Data Centre Infrastructure: Recognizing data centres as essential national infrastructure, like roads and airports, could accelerate approvals and investments. Power and Energy: Assured access to competitively priced green power, faster approvals for captive and renewable linked capacity and dedicated power corridors could support data centre growth. Tax Incentives: Time bound tax holidays linked to capacity and green targets, smoother GST input tax credit on capital assets and customs duty relief on AI infrastructure imports could attract investments," said Deepak Kedia, Chief Financial Officer (CFO), Mastek Group.

"The targeted policy support from the budget, such as the extension of PLI benefits to energy-efficient consumer durables, the rationalization of GST on cooling appliances, incentives for local component manufacturing, and improved access to working capital for MSME-led dealer and distributor networks, will be crucial for the continuous growth of the sector from the very beginning. These steps not only make products more affordable but also allow the domestic manufacturing sector to grow and Indian consumer durables brands to become stronger in both the domestic and export markets," said Kalpesh Ramoliya, Founder and Chairman, Raj Cooling Systems

"The budget measures aimed at the sector include increased R&D tax support, export-oriented PLI plans for automation hardware and software, accelerated depreciation for Industry 4.0, enhanced access to export credits for the long term and skilling programs for robotics and artificial intelligence. All of the above measures together have the potential to bring about the shift of India as a global hub for innovative manufacturing and intelligent automation solutions," said Srinivas Choudhary, Founder and CEO of Alligator Automations.

"Enhanced incentives for MSMEs, especially those investing in skilled artisans, sustainable fabrics, and modern production technologies, would help brands scale responsibly. Additionally, improved access to working capital and export-focused incentives can empower homegrown designer labels to expand into international markets. A budget that supports innovation, craftsmanship, and global outreach will not only boost the fashion industry but also create employment and reinforce India’s position as a hub for luxury and design-led manufacturing," said Rohan Gupta, Managing Director & Chief Financial Officer, Gargee Designer.

"The reduced compliance frameworks and the public-private collaboration will be conducive to the start-ups gaining access to the market faster and going on to create meaningful solutions. A balanced and clear-cut approach to responsible AI is equally important. Moreover, the partnership of heavy investments in AI skills, ethical governance structures, and cooperation between industry can bring about innovation that is both accountable and trusted," said Priyanka Aeron, Co-founder of Thrive Global.

“If the next wave of inclusive growth is to be unlocked, then Budget 2026 should give priority to last-mile integration that is accessible, sustainable, and trustworthy. The strengthening of the incentives for Banking Correspondents and local merchants supported by fintech would mean that financial access in regions that are not well served would be faster. The reduction of the compliance costs for small fintech companies and the acceleration of payment cycles under government-led financial inclusion programs would mean that the service at the grassroots level would be continuous," said Shams Tabrej, Co-founder & CEO of Ezeepay.