Budget 2026: From tax reforms to manufacturing… the common man will get it all in the budget!
The government will present its budget in February 2026. This budget may include various decisions, from tax reforms to relief for the common man. Let's explore these in detail.
India's economy is currently in a strong phase, and its greatest strength lies in the country's millions of consumers. Domestic consumption remains the foundation of the Indian economy, contributing approximately 60% to GDP.
As Budget 2026 approaches, policymakers are focused on reducing the burden on ordinary people's pockets to maintain their spending power. Amid global uncertainties, if the country's consumers remain confident, the pace of growth automatically remains strong.
The new phase of GST, GST 2.0 , is being considered a significant step in this direction. Simplifying tax slabs, moving to two main rates, and reducing taxes on daily necessities, electronics, and small cars have directly brought relief to the common man.
This has made goods cheaper and left people with more money to spend. This has led to increased retail sales and market activity, a result of which is clearly visible in GST collections.
Benefits to consumers
The constant dialogue between the government and industry has also been a major positive aspect of the GST system. Periodic clarifications to regulations, digital improvements, and simplification of processes boost business confidence.
When doing business becomes easier, costs decrease, and the benefits ultimately pass on to consumers. As India becomes a major manufacturing hub and a global corporation, a flexible and modern tax system is essential.
Need to bring petrol, diesel and electricity under GST
Even today, petrol, diesel, gas, and wind turbine fuel remain outside the GST, making transportation and logistics expensive. Bringing these items under the GST ambit and ensuring state revenue protection would reduce freight costs and curb inflation. Similarly, including electricity and real estate under GST would eliminate hidden taxes, making home construction and electricity use cheaper.
Input tax credit needs to be improved
The fundamental principle of GST is that the ultimate tax burden should fall on consumers, not businesses. However, current rules have certain restrictions that prevent companies from receiving full input tax credit.
This impacts costs and increases prices. If these rules are simplified and rationalized, GST could truly become a pure consumption tax.
Refunds and dispute resolution are also important
Refund limitations are also a major problem in cases of inverted tax structures. Money stuck on input services and capital goods impacts companies' liquidity. If this is addressed in a phased manner, market prices could become more competitive.
Furthermore, the GST Appellate Tribunal must be fully operational to ensure speedy resolution of tax disputes and a reliable business environment.
Budget 2026 presents a golden opportunity for the government to further strengthen consumer confidence through tax reforms. A simplified GST, lower costs, improved credit management, and ease of doing business can together take the country's consumption-driven economy to new heights. Only when the common man spends with confidence will India's growth story progress.
GST
Budget 2026