Mumbai, 28th Jan 2026: Kantar has released the fifth edition of its annual India Union Budget Survey, offering insights into evolving consumer sentiment ahead of the 2026 Union Budget release on 1 February.
While satisfaction with the 2025 Budget was strong- largely driven by tax reforms, consumer outlook for 2026 reflects measured realism. Beyond taxation, sentiment reveals growing caution, shaped by concerns around economic slowdown, income stability and future preparedness. Inflationary pressures, job security worries and global uncertainties continue to influence household decision-making, leading to more restrained spending and a greater focus on financial stability over discretionary growth. Optimism around long-term economic ambitions, including India’s USD 5 trillion economy target, has softened, alongside moderated expectations from the startup ecosystem.
At the same time, India is rapidly transitioning toward a cashless digital economy and with an AI-enabled future looking not so distant anymore, consumers are calling for stronger regulatory frameworks, enhanced upskilling initiatives and clearer policy direction to navigate this next phase of transformation.
Key highlights from the survey:
Tax relief brings optimism, but financial security remains fragile:
- 70% Indians said that the 2025 Union Budget met their expectations, largely due to tax reliefs. This marked a significant improvement over the last couple of years, when the sentiment was on a steady decline (73% in 2023 to 67% in 2025’s survey)
- However, demand for further personal tax reforms remains steady, particularly among middle-class households. Key expectations include increasing the standard deduction from INR 75,000 to INR 1 lakh and enhanced Section 80 deductions & rebates on medical and health insurance.
- At the same time, inflation continues to weigh heavily on household decision-making, with concern rising from 57% in 2024 to 60% in 2026.
- Over one-third of Indians (36%) also cite job layoffs as a key worry, reflecting growing unease around income stability and long-term preparedness.
Cautious consumption reflects a more measured economic outlook:
- Belief in India achieving its USD 5 trillion economy milestone has shifted from 2027-28 to 2028–29, reflecting a more realistic and grounded consumer outlook.
- 51% Indians also view global geopolitical conflicts as a threat to economic growth and stability.
- Views on US tariffs remain divided, with 58% either confused or pessimistic about their impact. Business owners and the self-employed express higher levels of concern, while salaried consumers show relatively greater optimism around export diversification.
- This economic uncertainty and inflationary challenges are translating directly into restrained consumer spending:
- Intent to spend on discretionary categories such as dining out, shopping, entertainment and subscriptions has declined to 55% in 2026, down from 58% in 2024.
- Similarly, appetite for high-ticket purchases including leisure travel, vehicles, property and luxury goods has fallen to 46%, compared to 51% two years ago.
- Confidence in India’s broader growth story is also moderating. Expectations of improved performance from India’s startup ecosystem have softened to 67%, down from 73% in 2024. Market sentiment mirrors this caution, with 63% of consumers expecting the BSE Sensex to trade within the 86,000–95,000 range in 2026.
AI goes mainstream, but trust and job security concerns persist:
- Artificial intelligence has become firmly embedded in everyday life, with 79% of consumers using AI multiple times a week.
- A majority (54%) believe AI will drive upskilling, new skill development, and workplace efficiency, with Ecommerce, Education and Cyber Security industries seen as the biggest beneficiaries.
- However, alongside this optimism, concerns remain. Nearly one in five consumers (18%) worry about potential job losses or role reductions due to AI, while 54% cite AI misuse and AI-led financial fraud as a growing risk.
- There is also increasing demand for government support in AI adoption, with 53% advocating faster regulatory approvals and tax incentives for early-stage AI startups.
- India’s shift toward a cashless economy is also accelerating, with digital payment adoption rising from 53% in 2024 to 67% presently, led primarily by the salaried class.
Policy awareness and infrastructure gaps shape adoption of reforms and sustainability:
- Awareness of the New Labour Code reforms stands at 51%, with eight in ten informed consumers expecting a positive impact.
- In contrast, awareness of the Digital Personal Data Protection Rules 2025 remains limited, highlighting the need for clearer government communication.
- Sustainability intent is visible, with 58% of consumers planning to adopt electric vehicles. However, practical barriers such as limited charging infrastructure and concerns around battery safety continue to hinder an even wider adoption.
Commenting on this year’s survey, Deepender Rana, Executive Managing Director- South Asia, Kantar, said “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. While tax relief has lifted sentiment, households are increasingly focused on income stability and future preparedness. 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.”
