Budget 2026 Expectations: FMCG Firms Push for Consumption-Boosting Tax Measures Amid Tight Fiscal Space

Sushil Kumar Aggarwal, Chairman of AVRO India and National President of AIPMFMA, said India’s formal recycling sector is constrained by outdated policies, noting that “high GST on plastic waste, scrap and recycling machinery makes compliant recycling financially uncompetitive.” He said the Budget should “zero-rate GST on plastic waste and recycling equipment and lower GST on recycled plastic granules” to speed up the shift from virgin plastics.

Aggarwal added that “EPR cannot work unless it is clear, stable and fully traceable,” and called for stronger guidelines, along with “a dedicated technology upgradation fund and targeted subsidies” to help recyclers invest, improve efficiency and meet global standards.

Agri-tech leaders want Budget 2026 to shift focus from traditional production to an innovation- and market-oriented agricultural model. They are calling for stronger export infrastructure, quality systems and cold chains to boost competitiveness and farmer incomes. The industry also seeks greater digitisation, tailored rural credit and higher investment in R&D to drive farm-level impact and adoption of technology.

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Srinivas Suthram, Senior Vice President at Kshema Power India, said that as India’s renewable energy transition gains pace, the Union Budget has an important role to play in accelerating deployment across solar and wind power. He noted that continued government support for solar and EPC-led infrastructure projects is essential to sustain capacity additions and strengthen execution on the ground.

Suthram also emphasised the need for clear and consistent policies on land availability and grid connectivity to revive momentum in the wind sector and encourage long-term investments. He added that a calibrated rationalisation of import duties on critical renewable components, including key equipment used in power evacuation and substations, would help reduce project costs, ease supply-chain challenges and improve overall project viability while domestic manufacturing scales up.

Dipanjan Banerjee, Chief Commercial Officer at Blue Dart, said Budget 2026 can accelerate efficiency-led growth in India’s logistics sector by strengthening integration across transport networks and cutting operational bottlenecks. He said the focus should be on "seamless physical and digital integration across air, road, rail and multimodal corridors" to reduce delays, simplify customs and bring logistics costs closer to global benchmarks, which is crucial for exports.

Banerjee added that policy support to ease cross-border e-commerce for MSMEs and digitise trade processes could unlock export potential from smaller cities, noting that "supportive policy measures that make cross-border e-commerce easier for MSMEs" are key.

He also called for continued backing of high-growth sectors and a green mobility push, stressing that "rationalising taxation on green transport technologies and accelerating Sustainable Aviation Fuel pathways" would help future-proof logistics while supporting climate goals.

Ankit Agarwal, Managing Director of Alankit Limited, said the Union Budget 2026 should go beyond fiscal arithmetic and serve as a roadmap for inclusive and digital-led growth. He said the Budget can help expand e-governance and financial services in line with national priorities, adding that it is about moving towards “a digitally empowered India where citizens experience transparency, efficiency, and trust in governance.”

Agarwal noted that tax-friendly measures could play a key role in driving financial inclusion, especially in smaller cities, saying such steps would “inspire citizens in Tier II and Tier III cities to avail themselves of financial service offerings,” thereby bringing a larger population into the formal financial system.

He also pitched for structural reforms in personal finance architecture, expressing hope that the Budget would encourage “the creation of a single account for every individual,” allowing investments, pensions, property transactions and other financial activities to be handled seamlessly under one unified framework.

As India heads into Union Budget 2026, businesses are prioritising policy stability, predictability and execution over headline-grabbing announcements, according to Grant Thornton Bharat’s Pre-Budget Survey. With the economy projected to grow 6.5–7% in FY26, industry expects the Budget to sustain momentum while balancing growth with fiscal discipline.

Richa Sawhney, Partner (Tax) at Grant Thornton Bharat, said the survey reveals a clear demand for clarity across tax, trade and customs. She said businesses are seeking “greater clarity and predictability” in the transition to a new Income-tax Act, GST administration and digital customs systems, with an emphasis on “stable frameworks, smoother implementation and reduced compliances.” She added that despite recent changes to the new tax regime, “demand for further tweaks continues to top taxpayers’ wishlist.”

On fiscal strategy, respondents broadly favour a calibrated approach that supports growth without undermining investor confidence. Innovation incentives such as sector-specific funds and weighted tax deductions for R&D emerged as preferred tools, while long-term infrastructure investment is seen as dependent on stable tax regimes for InvITs, REITs and infrastructure bonds rather than new incentives.

The survey also highlights execution as a key concern, with businesses calling for digitised project tracking, streamlined compliance and faster approvals. Renewable energy and storage remain top infrastructure priorities, while simplified export incentives and globally aligned customs norms are seen as critical to boosting manufacturing competitiveness.

Mayank Kale, CEO & Co-founder of Loop Health said that Budget 2026 is a chance to correct a structural imbalance in India’s health insurance system.

"While group health insurance covers nearly half of insured Indians, it receives no tax support, even as retail insurance enjoys tax benefits. Zero-rating GST on group health premiums and allowing full input tax credit can significantly lower costs for employers and unlock greater investment in preventive care," he added.

"With the New Tax Regime reducing the relevance of Section 80D, it’s time to shift incentives toward prevention, early detection, and regular health monitoring. Supporting workforce health isn’t just a social priority—it’s an economic one. Budget 2026 must shift India’s health mission from insurance for all to healthcare for all," Kale further said.