Budget 2026: As Finance Minister Nirmala Sitaraman is set to present the 2026 Union Budget on February 1, consumer sentiment for the year reflects caution and measured realism, reveals a report by research firm Kantar.
While there was strong satisfaction with the previous year’s Budget, largely driven by the income tax reforms, consumers have pointed to economic slowdown and income instability as growing concerns.
“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,” said Deepender Rana, managing director- South Asia, Kantar, adding that this uncertainty is directly reflecting in restrained consumer spending.
According to the study, intent to spend on discretionary categories such as dining out, shopping and entertainment has declined to 55% in 2026, as compared to 58% in 2024. Consumer appetite for high-ticket purchases such as travel, vehicles, luxury goods and property have fallen to 46% from 51% two years ago.
Also Read | Budget 2026: Relief for India’s aam aadmi lies in the fine print
Despite relief from last year’s IT slab revisions, financial security remains fragile with a strong demand for further tax reforms, particularly among middle-class households. As per the study, key expectations from this year’s Budget include increasing the standard deduction from Rs 75000 to Rs 1 lakh.
Additionally, Section 80 deductions and rebates on medical and health insurance are also being demanded by consumers.
“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,” said Rana.
A softening optimism around long-term economic ambitions was also reported by the study, as the belief in India achieving its $5 trillion milestone has shifted from 2027-28 to 2028-29, reflecting a more realistic and grounded consumer outlook.
Also Read: Union Budget 2026: India may widen gates for foreign goods as world hunts for destinations beyond the US
Global economic pressures such as the US tariffs were a key cause for concern for business owners and self-employed consumers as per the study. Salaried consumers on the other hand showed relatively greater optimism around export diversification.
The report also showed a moderation in consumers’ confidence in India’s growth story with expectations from the startup ecosystem down to 67% from the earlier 73% in 2024. Market sentiment also showed signs of dampening, with 63% of consumers expecting the BSE Sensex to trade within the 86000-95000 range for the year.
Additionally, with the democratisation of artificial intelligence, trust and job security concerns have also deepened, with 18% of consumers worried about potential job losses and 54% citing AI-led misuse and financial fraud risks.
“Policies that support upskilling, responsible AI adoption and digital trust will be critical to sustain confidence in India’s growth story,” added Rana.
While there was strong satisfaction with the previous year’s Budget, largely driven by the income tax reforms, consumers have pointed to economic slowdown and income instability as growing concerns.
“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,” said Deepender Rana, managing director- South Asia, Kantar, adding that this uncertainty is directly reflecting in restrained consumer spending.
According to the study, intent to spend on discretionary categories such as dining out, shopping and entertainment has declined to 55% in 2026, as compared to 58% in 2024. Consumer appetite for high-ticket purchases such as travel, vehicles, luxury goods and property have fallen to 46% from 51% two years ago.
Also Read | Budget 2026: Relief for India’s aam aadmi lies in the fine print
Despite relief from last year’s IT slab revisions, financial security remains fragile with a strong demand for further tax reforms, particularly among middle-class households. As per the study, key expectations from this year’s Budget include increasing the standard deduction from Rs 75000 to Rs 1 lakh.
Additionally, Section 80 deductions and rebates on medical and health insurance are also being demanded by consumers.
“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,” said Rana.
A softening optimism around long-term economic ambitions was also reported by the study, as the belief in India achieving its $5 trillion milestone has shifted from 2027-28 to 2028-29, reflecting a more realistic and grounded consumer outlook.
Also Read: Union Budget 2026: India may widen gates for foreign goods as world hunts for destinations beyond the US
Global economic pressures such as the US tariffs were a key cause for concern for business owners and self-employed consumers as per the study. Salaried consumers on the other hand showed relatively greater optimism around export diversification.
The report also showed a moderation in consumers’ confidence in India’s growth story with expectations from the startup ecosystem down to 67% from the earlier 73% in 2024. Market sentiment also showed signs of dampening, with 63% of consumers expecting the BSE Sensex to trade within the 86000-95000 range for the year.
Additionally, with the democratisation of artificial intelligence, trust and job security concerns have also deepened, with 18% of consumers worried about potential job losses and 54% citing AI-led misuse and financial fraud risks.
“Policies that support upskilling, responsible AI adoption and digital trust will be critical to sustain confidence in India’s growth story,” added Rana.
