Union Budget 2026 reinforces the financial sector’s role as the backbone of economic expansion, with a strong focus on credit flow, digital inclusion, and systemic resilience. Measures aimed at strengthening public and private banking institutions, improving asset quality, and expanding last-mile credit are expected to support businesses, consumers, and infrastructure growth alike. Key industry leaders respond to the budget.
Sanjay Doshi, Partner and Head, Transaction Services and Financial Services Advisory, KPMG in India: Given the current strength of bank’s balance sheet historically driven by resolution of large NPA situations and retail loan growth, banks will now focus significantly on loan growth towards infra and capex, MSME and manufacturing especially in the 7 strategic and frontier sectors. Also the setting-up of high-level committee on Banking for Viksit Bharat is significant as banking is key to ensure success of the budget focus areas by ensuring credit in the right direction. The Committee should bring clarity on following – foreign investment in banking, bank of the future, Indian banks going global, Private equity in banking, etc. Also, one of the other key areas for focus should be to strengthen or incentivise Bank’s ability to continue raising high level of CASA (Current Accounts and Savings Accounts) and deposits which currently is under significant pressure from alternate investment products.
Mr. Sanjay Agarwal, Chief Executive Officer, Ambit Finvest: The 2026 Budget underscores a decisive push to make Indian MSMEs globally competitive. The ₹10,000 crore SME Growth Fund, providing equity support to high-potential MSMEs based on performance and scalability, is a landmark step toward creating MSME champions. Equally significant are measures to ease liquidity constraints: mandatory TReDS adoption by Central Public Sector Enterprises, credit guarantee support for invoice discounting, integration of GeM with TReDS, and development of receivables as asset-backed securities. The initiative to revive ~200 stressed industrial clusters further modernises infrastructure, restores jobs, and strengthens MSME competitiveness.
Sunil Badala, National Head of Tax, KPMG in India: Union Budget 2026 delivers a strong, forward‑looking push for the BFSI sector, indicating the government’s commitment to financial stability, deeper capital markets, and simplified tax administration.
The proposal to set up a High‑Level Committee on Banking for Viksit Bharat marks a major structural reform, aimed at strengthening governance, enhancing financial resilience, and better aligning credit delivery and inclusion with India’s next phase of economic growth. The NBFC roadmap further builds on this momentum, outlining clear targets for credit expansion and technology adoption, supported by the proposed restructuring of key public‑sector NBFCs to improve scale and efficiency.
On the capital‑markets front, the introduction of a market‑making framework providing access to fund and derivatives on corporate bond indices, total return swaps, and permission to Persons Resident Outside India for making direct investment in listed equities are expected to significantly deepen market participation and improve liquidity-although the increase in STT on derivatives may dampen the sentiment in the trading community.
The Budget also reflects strong responsiveness to key industry demands, many of them were highlighted in the KPMG CFO Survey, including safe harbour provisions, TDS–TCS rationalization and revisions to penalty and assessment rules (including black money law). Another prominent demand in the survey was to provide tax certainty and clarity for IFSC units which has been met through an enhanced tax holiday regime, extended from 10 to 20 years with a 15 percent post‑holiday tax rate thereby reinforcing India’s position as a global financial hub.
Overall, Budget 2026 strengthens governance, deepens markets, and reduces compliance burden-positioning India’s BFSI sector for a more competitive, globally aligned future.
