Indians greet Budget 2026 with caution, not cheer: Kantar survey

Mumbai: As India heads into the Union Budget on February 1, consumers are no longer starry-eyed. They are alert, restrained and quietly anxious. Kantar’s fifth annual India Union Budget Survey shows optimism lifted by tax relief last year, but tempered by inflation, job insecurity and global uncertainty as Budget 2026 approaches.

Satisfaction with the 2025 Budget remains relatively strong, with 70 per cent of Indians saying it met expectations, largely due to tax reforms. That marked a rebound after sentiment slid from 73 per cent in 2023 to 67 per cent in 2025. Yet the mood has shifted from hope to hard-nosed realism. Households are now prioritising income stability and future preparedness over discretionary growth.

Inflation continues to bite. Concern has risen to 60 per cent in 2026, up from 57 per cent in 2024, while 36 per cent of respondents cited layoffs as a key worry, underscoring unease around job security. Demand for further personal tax relief remains steady, especially among the middle class. Key expectations include raising the standard deduction from Rs 75,000 to Rs 1 lakh, alongside enhanced Section 80 deductions and medical and health insurance rebates.

Economic caution is also reshaping consumption. Faith in India achieving its $5 trillion economy milestone has slipped from 2027–28 to 2028–29, reflecting a more grounded outlook. 51 per cent of Indians see global geopolitical conflicts as a threat to growth and stability, while views on US tariffs are split, with 58 per cent either confused or pessimistic. Business owners and the self-employed are more wary, even as salaried consumers show greater optimism around export diversification.

This uncertainty is translating into tighter spending. Intent to spend on discretionary categories such as dining out, shopping, entertainment and subscriptions has fallen to 55 per cent in 2026, down from 58 per cent in 2024. Appetite for big-ticket purchases including leisure travel, vehicles, property and luxury goods has dropped to 46 per cent, from 51 per cent two years ago.

Confidence in India’s broader growth narrative is also cooling. Expectations of improved performance from the startup ecosystem have eased to 67 per cent, down from 73 per cent in 2024. Market sentiment mirrors this restraint, with 63 per cent of consumers expecting the BSE Sensex to trade between 86,000 and 95,000 in 2026.

Artificial intelligence, meanwhile, has gone mainstream. 79 per cent of consumers now use AI multiple times a week. A majority, 54 per cent, believe it will drive upskilling, new skills and workplace efficiency, with ecommerce, education and cyber security seen as the biggest beneficiaries. Yet unease lingers. 18 per cent fear job losses or role reductions due to AI, while 54 per cent flag AI misuse and AI-led financial fraud as rising risks. More than half, 53 per cent, are calling for faster regulatory approvals and tax incentives for early-stage AI startups.

India’s march towards a cashless economy is accelerating too. Digital payment adoption has climbed from **53 per cent in 2024 to 67 per cent** now, led primarily by salaried consumers.

Policy awareness, however, remains uneven. Awareness of the new labour code reforms stands at 51 per cent, with eight in ten informed respondents expecting a positive impact. By contrast, awareness of the Digital Personal Data Protection Rules 2025 remains limited, pointing to gaps in government communication.

Sustainability intent is visible but constrained. 58 per cent of consumers plan to adopt electric vehicles, though limited charging infrastructure and battery safety concerns continue to slow wider adoption.

Commenting on the findings, Deepender Rana, executive managing director, south Asia, Kantar, said consumer sentiment has clearly matured. “Over the past few years, 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. While tax relief has lifted sentiment, households are increasingly focused on income stability and future preparedness,” he said.

Rana added that consumers expect sharper engagement from policymakers. “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. Policies that support upskilling, responsible AI adoption and digital trust will be critical to sustain confidence in India’s growth story.”

For Budget 2026, the message is blunt: Indians are no longer asking for grand promises. They want reassurance, resilience and rules that help them steady the ship as the world turns choppy.