Union Budget 2026: Finance Sector Eyes Capex Hike, Regulatory Reforms, FDI Easing

• The finance sector anticipates a 12-15% hike in central capital expenditure (capex) for FY2026-27, targeting ₹11.2 trillion, to boost economic activity and infrastructure.
• Expectations include ₹1.5 lakh crore in interest-free loans to states for capex, encouraging aligned investments and relieving debt burdens.
• Further regulatory reforms, potentially 'Jan Vishwas 3.0', are sought to decriminalize minor offenses in taxation and environment, reducing litigation and compliance burdens.
• Simplification of compliance through digitization, extended validity of Customs Advance Rulings, and streamlined TDS rates are also on the agenda.
• The sector hopes for eased FDI norms in defense, e-commerce, and space, along with dispute resolution mechanisms for PPPs and tax incentives for GIFT-IFSC.

Why It Matters: The finance sector expects Budget 2026 to drive growth through increased capex, regulatory easing, and FDI liberalization.