The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman on February 1, 2026, emphasizes sustained economic growth, infrastructure development, fiscal prudence, and sectoral reforms under the theme of a Yuva Shakti-driven approach. With public capital expenditure hiked to ₹12.2 lakh crore (a nearly 9% increase), the Budget focuses on manufacturing scale-up, services enhancement, job creation through skilling, and targeted incentives across key industries. The fiscal deficit is projected to narrow to 4.3% of GDP, reflecting continued commitment to debt consolidation.
Industry leaders from healthcare, power infrastructure, hospitality, travel, and technology have welcomed several announcements, viewing them as enablers for growth, affordability, and global competitiveness.
In healthcare and emergency care, the Budget’s push to strengthen district hospitals and expand trauma facilities has been lauded for improving public health outcomes. Dr Varun Gupta, Co-Founder of NoWound by Medvital, a Make-in-India medtech company, stated: “We welcome the Government’s decision to strengthen district hospitals and expand emergency and trauma care capacity. As a Make-in-India new age medtech company, we are committed to contributing in every possible way by enabling access to advanced, standard-of-care advanced technologies for trauma and complex wound patients, and by working closely with public hospitals to improve reach, affordability, and outcomes.”
The power transmission and infrastructure sector benefits from sustained public capex, new Dedicated Freight Corridors, city economic regions, and measures like the proposed Infrastructure Risk Guarantee Fund and accelerated asset monetisation through REITs. Rajesh Kumar Singh, CEO of Jyoti Structures Ltd., highlighted: “The Union Budget 2026–27 provides a strong and sustained policy signal for the expansion and modernisation of India’s power transmission and infrastructure ecosystem. The continued thrust on public capital expenditure, development of new Dedicated Freight Corridors, creation of city economic regions, and targeted investments to ensure long-term energy security are critical enablers for strengthening the national grid and supporting India’s growing power demand. Measures such as the proposed Infrastructure Risk Guarantee Fund and accelerated asset monetisation through REITs are expected to improve financing confidence, reduce execution risks and facilitate timely completion of large-scale EPC projects. For Jyoti Structures, with a proven track record in executing extra high-voltage transmission lines, substations and turnkey grid projects across India and international markets, the Budget creates a conducive environment to support grid expansion, renewable energy integration and cross-regional connectivity, while reinforcing India’s broader electrification and infrastructure development priorities.”
Tourism and hospitality receive a significant boost through initiatives like the establishment of a National Institute of Hospitality (upgrading the existing National Council for Hotel Management and Catering Technology), talent upskilling, and digital infrastructure enhancements. Aditya Sanghi, CEO of Hotelogix, noted: “The Union Budget 2026-2027 sends a clear signal that the Indian tourism and hospitality industry is one of the most important drivers of jobs and growth. Enabling this industry through initiatives such as a National Institute of Hospitality, talent upskilling, and digital infrastructure are welcome steps. However, execution on the ground will define success in the long run. It must empower homegrown midscale hotels in Tier II/III markets to access modern solutions and a skilled workforce easily to thrive sustainably. At Hotelogix, we see this as a pivotal moment to support hotels in this segment with cloud-led, scalable technology that helps them ensure smarter operations and deliver consistently better guest experiences.”
For outbound travel businesses, the reduction of Tax Collected at Source (TCS) on overseas tour packages to a flat 2% addresses long-standing cash-flow challenges. Mr Chirag Agarwal, Co-founder & CEO of TravClan, said: “The Union Budget 2026 takes a constructive step towards addressing some long-standing operational challenges faced by outbound travel businesses. The reduction of TCS on overseas tour packages to 2% is a welcome move and will ease immediate cash-flow pressure for both travellers and agents, particularly in high-volume, cross-border transactions. Effective implementation will now be critical. Clear guidance on refund timelines, reconciliation processes and system readiness will determine how quickly this relief translates into day-to-day business operations. Beyond taxation, access to formal credit for booking-led travel businesses remains an important gap, as traditional lending frameworks still do not fully account for advance collections and extended settlement cycles. As outbound demand continues to expand from non-metro markets, sustained policy focus on international connectivity, efficient payment systems and regulatory simplicity will be important to support long-term growth. Overall, the Budget signals positive intent, and targeted follow-through can further strengthen the operating environment for Indian travel businesses.”
In the AI and cloud infrastructure space, proposals to club software development, IT-enabled services, knowledge process outsourcing, and contract R&D under a single “information technology services” category with a uniform safe harbour margin of 15.5% (expanded eligibility threshold to ₹2,000 crore), automated approvals, and five-year continuity reduce compliance burdens. A tax holiday until 2047 for foreign companies providing cloud services using Indian data centres, plus a 15% safe harbour on costs for related Indian entities, bolsters India’s appeal as a global hub. Sharad Sanghi, CEO & Co-Founder of Neysa, commented: “The Union Budget 2026–27 provides much-needed structural clarity for India’s AI and cloud infrastructure ecosystem. The government’s proposal to club software development, IT-enabled services, knowledge process outsourcing, and contract R&D services relating to software development under a single category of information technology services, with a uniform safe harbour margin of 15.5% and an expanded eligibility threshold from ₹300 crore to ₹2,000 crore, significantly improves tax certainty for larger technology and services companies operating at scale. By moving to automated, rule-driven safe harbour approvals and enabling five-year continuity, the regime meaningfully reduces friction and compliance overheads. Equally consequential is the proposal to offer a tax holiday until 2047 for foreign companies providing cloud services to customers outside India using data centre services based in India, along with a 15% safe harbour on cost for related Indian entities delivering those data centre services. These measures directly strengthen India’s attractiveness as a hub for cloud and AI infrastructure and support the shift towards domestically hosted compute. For Neysa, which is focused on building cloud-native AI platforms on resilient, India-based infrastructure, these announcements create a predictable and enabling environment to help enterprises move from pilots to large-scale AI deployment. By addressing tax certainty for IT services, incentivising global cloud services anchored on Indian data centres, and encouraging fresh data centre investment together, the Budget lays a strong foundation for India’s next phase of enterprise AI adoption.”
Overall, the Budget reinforces India’s trajectory toward Viksit Bharat by 2047, balancing infrastructure-led growth with inclusive reforms in critical sectors. Industry responses indicate optimism, contingent on swift and effective implementation.
