Mumbai: Indians are heading into the Union Budget 2026 with a more pragmatic and cautious outlook, shaped by inflationary pressures, job security concerns and global uncertainties, according to the fifth edition of Kantar’s annual India Union Budget Survey released ahead of the Budget announcement on February 1.
While satisfaction with the 2025 Union Budget remained strong—driven largely by personal tax reliefs—consumer sentiment for 2026 reflects measured realism. Beyond taxation, households are increasingly prioritising income stability and long-term financial preparedness over discretionary spending, amid concerns of an economic slowdown and uncertain global conditions.
The survey found that 70% of Indians felt the 2025 Budget met their expectations, a marked improvement after a steady decline in sentiment over recent years. However, demand for further personal tax reforms continues, particularly among middle-class households, with expectations centred on raising the standard deduction to INR 1 lakh and enhanced Section 80 deductions, including health insurance benefits.
Inflation remains a key concern, with 60% of consumers citing it as a challenge in 2026, up from 57% in 2024. Job security has also emerged as a growing worry, with 36% of respondents expressing concerns over layoffs and income stability.
Caution is also evident in broader economic expectations. Belief in India achieving its USD 5 trillion economy milestone has shifted from 2027–28 to 2028–29. Over half of respondents (51%) see global geopolitical conflicts as a threat to economic growth, while views on the impact of US tariffs remain divided, particularly among business owners and the self-employed.
This uncertainty is translating into restrained consumption. Intent to spend on discretionary categories such as dining, entertainment and subscriptions has declined to 55% in 2026, while appetite for high-ticket purchases, including travel, vehicles and luxury goods, has fallen to 46%. Optimism around India’s startup ecosystem has also softened, with expectations dropping to 67% from 73% in 2024.
At the same time, artificial intelligence is becoming mainstream, with 79% of consumers using AI multiple times a week. While a majority see AI as a driver of upskilling and productivity, concerns around job displacement, misuse and financial fraud persist, prompting calls for stronger regulatory oversight and government support for AI-led innovation. India’s transition toward a cashless economy is also accelerating, with digital payment adoption rising to 67%.
The survey further highlights uneven awareness of policy reforms, with moderate familiarity around New Labour Codes but limited understanding of the Digital Personal Data Protection Rules 2025. Sustainability intent remains high, with 58% of consumers planning to adopt electric vehicles, though infrastructure gaps continue to pose challenges.
Commenting on the findings, Deepender Rana, Executive Managing Director–South Asia, Kantar, said, “Over the past few years, the consumer sentiment has shifted from optimism to a more pragmatic outlook. Concerns around inflation and job security persist, now compounded by global uncertainties and geopolitical tensions. While tax relief has lifted sentiment, households are increasingly focused on income stability and future preparedness. There is a clear expectation for the government to engage more closely with the middle class and taxpayers through targeted reforms, stronger economic safeguards and transparent communication. Policies that support upskilling, responsible AI adoption and digital trust will be critical to sustain confidence in India’s growth story.
