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Budget 2026 Expectations: Expert Rahul Arora believes that the government may prioritize the domestic economy in Budget 2026. Changes in customs duties, controlling expenditure, and reducing foreign dependence could be the government's main strategies.

Budget 2026 Expectations: Rahul Arora, CEO of Ashika Group, has made some important points regarding the Union Budget 2026. He believes that this time the government will have to introduce a budget that strengthens the domestic economy and reduces foreign dependence.

More Focus on Domestic Economy

According to Rahul Arora, in the current circumstances, the government should introduce a budget that focuses on the domestic economy. This means a budget that protects domestic industries, promotes domestically manufactured goods, and gradually reduces dependence on imported products. He said that the government may make some changes regarding customs duties. Concessions may be offered, especially on certain goods coming from the US. Furthermore, the government may also explore options like barter trade in the future.

Global situation unclear yet

Rahul Arora says that there is considerable uncertainty surrounding tariffs and trade deals worldwide. In such a scenario, the government's focus will be on reducing dependence on foreign markets and strengthening the country's internal economic strength. Regarding government expenditure, Arora believes that capital expenditure of approximately ₹10.8 lakh crore in FY26 appears more realistic, compared to the budget's earlier estimate of ₹11.1 lakh crore. He also noted that tax collections this year have been lower than expected, so the government will have to exercise greater caution when spending.

What is the situation regarding taxes and deficits?

According to him, tax revenues are expected to remain around 8 to 10 percent, making it difficult for the government to reduce expenditures. The fiscal deficit, which is around 4.4 percent this year, is expected to decline slightly to around 4.2 percent next year. Disinvestment, or selling stakes in government companies, will also pose challenges. The government has failed to meet its targets for several years, and the current stock market situation is not particularly conducive. Despite this, the government will continue its efforts to raise funds from government companies.

Private Investment and the Defence Sector

Rahul Arora stated that private company investment will largely depend on government spending. If market demand increases, private investment may also accelerate. Describing the defense sector as crucial, he said that defense spending has increased rapidly this year, but such rapid growth is unlikely to last long. Arora expressed concern about the rupee's weakness, saying that if the rupee remains weak for a prolonged period, foreign investors may shy away. However, it is a matter of relief that crude oil prices are currently under control, which has prevented significant pressure on the country's current account.