What Budget 2026 Is Fixing While Everyone Looks For Tax Relief?

Union Budget 2026 does not try to grab attention with big announcements or sweeping promises. Instead, it focuses on areas that usually don't make headlines but matter deeply for how the economy functions over time. The emphasis is clearly on strengthening systems rather than delivering instant excitement.

One of the more telling announcements is the plan to set up a high-level committee on banking for Viksit Bharat. This suggests the government recognises that the banking system now needs to evolve for the next phase of growth, not just keep doing more of the same.

The stated focus on stability, inclusion, and consumer protection also reflects lessons learnt from past credit cycles.

"Alongside this, the budget lays out a clearer direction for NBFCs, with attention on both credit delivery and technology. The proposed restructuring of Power Finance Corporation and Rural Electrification Corporation looks like an early step toward improving efficiency and capital use in public sector lenders, particularly in the power space," said Ajay Kumar Yadav, CFP CM, Group CEO& CIO , Wise FinServ.

The push to deepen the corporate bond market is another important shift. Anyone familiar with Indian bond markets knows that liquidity has always been a constraint. Introducing a market-making framework could help address that gap by making it easier to buy and sell bonds without sharp price swings.

Allowing total return swaps on corporate bonds also opens the door for larger domestic and foreign investors who want exposure but prefer simpler structures. Over time, this could reduce the economy's dependence on banks as the primary source of long-term capital.

"Municipal bonds also receive attention in this budget. Cities that raise more than Rs 1,000 crore in a single bond issuance will be given a Rs 100 crore incentive. The amount itself is less important than the message it sends. The government is clearly encouraging large urban bodies to improve governance standards and tap capital markets directly for infrastructure needs, rather than relying only on central or state allocations," added Ajay Kumar Yadav.

There is continuity as well in the push for asset recycling through REITs and InvITs. By monetising completed projects and redeploying that capital into new ones, the government is trying to improve how efficiently public money is used, without increasing borrowing.

Support for MSMEs is directed at a very real, day-to-day problem. Delayed payments and working capital shortages continue to hurt small businesses. Expanding the use of TReDS, along with credit guarantees, is a practical attempt to ease this pressure rather than offering headline subsidies.

On market regulation, the budget proposes a small increase in Securities Transaction Tax on futures and options. STT on futures has been raised from 0.02 %to 0.05 %, while options-related STT has moved to 0.15 percent. This is not aimed at long-term investors. The intent appears to be to curb excessive short-term speculation, particularly in high-frequency derivatives trading, without changing capital gains taxes or investor-friendly policies.

"Finally, the budget signals a review of FEMA rules for non-debt instruments and clearer regulatory treatment for areas such as data centres and technology services. These are steps meant to reduce friction for long-term global capital rather than chase hot money," stated Ajay Kumar Yadav.

Taken together, Budget 2026 is not designed to produce an immediate market rally. It is about making the financial system deeper, more stable, and better aligned with long-term growth.