Budget 2026 Live Updates: GST Rationalisation for EVs, Growth Outlook & Market Expectations

India is gearing up for the Union Budget 2026-27, scheduled to be presented on February 1, 2026, by Finance Minister Nirmala Sitharaman. This will mark her ninth consecutive Union Budget, a record-setting moment, coming at a time of global economic uncertainty and fragile trade conditions.

With the Economic Survey 2025-26 setting the tone, markets, investors, and industries are closely tracking policy signals related to economic growth, taxation, capital markets, and sectoral reforms.

Economic Survey 2026: Growth Outlook Remains Strong

The Economic Survey projects India’s GDP growth in the range of 6.8% to 7.2% in FY27, with potential growth estimated around 7%. Despite rising geopolitical tensions and global trade fragmentation, India has been described as:

“An oasis of macro stability in a turbulent world.”

Key growth drivers highlighted include:

• Strong domestic consumption

• Controlled inflation levels

• Robust foreign exchange reserves

• Improved fiscal discipline

However, the Survey also cautions against external headwinds, including slowing global demand and uncertainty in international trade.

GST Rationalisation & EV Adoption in Focus

One of the key expectations from Budget 2026 is GST rationalisation, especially to support Electric Vehicle (EV) adoption. Experts believe rationalised GST rates on EVs, batteries, and charging infrastructure could:

• Reduce costs for consumers

• Boost domestic EV manufacturing

• Accelerate India’s clean energy transition

Policy clarity in this area may significantly benefit EV-related stocks and the broader auto sector.

Capital Markets & Investor Expectations

Markets will remain open on Budget Day, with both NSE and BSE operating normal trading hours. Investors are entering Budget Day with muted expectations, focusing mainly on:

• Possible relief in Long-Term Capital Gains (LTCG) tax

• No increase in Securities Transaction Tax (STT)

• Continued push towards ease of doing business

  

• Stable fiscal roadmap without aggressive taxation

Any positive surprise on capital gains taxation could act as a sentiment booster for equity markets.

Sectoral Allocations & Policy Signals to Watch

Key areas investors and industry leaders will track include:

• Infrastructure & capital expenditure (capex)

• Export competitiveness and trade diversification

• Manufacturing & MSME support

• Income tax slabs and compliance simplification

• EVs, renewable energy, and green mobility

Balanced sectoral allocations will be crucial to sustaining growth momentum while maintaining fiscal discipline.

Government’s Vision: Reform, Perform & Transform

Prime Minister Narendra Modi has reiterated that Budget 2026 should focus on:

“Reform, Perform and Transform”

The emphasis is expected to shift from solving long-pending issues to delivering long-term structural solutions, strengthening India’s economic resilience.

Market Outlook Ahead of Budget 2026

With India positioned as one of the fastest-growing major economies, Budget 2026 will play a pivotal role in shaping:

• Market sentiment

• Investment flows

• Sector-specific opportunities

While expectations remain cautious, clear reform signals and tax stability could provide the confidence markets need to sustain momentum.

Disclaimer

Stock market investments are subject to market risks. Past performance is not indicative of future results.