As Finance Minister Nirmala Sitharaman prepares to present the Union Budget 2026 in the Lok Sabha on 1 February 2026, industry leaders across telecom, AI, data protection, cybersecurity, fintech, and BFSI have outlined their expectations, calling for policy clarity, infrastructure investments, and regulatory reforms to support India’s digital and economic ambitions.
Also read: Key Union Budget 2025 Highlights
Telecom Industry Pushes for Levy Rationalisation
The telecom sector has once again highlighted the financial stress it faces and the need for relief to sustain network expansion and next-generation connectivity. Lt. Gen. Dr. S.P. Kochhar, Director General, COAI, said the industry body has been consistently engaging with the government on easing structural burdens. “COAI, as the industry body for telecom operators, has been advocating for measures that would reduce the sector’s financial burden, thereby enabling further expansion and rollout of next-generation connectivity to achieve the goal of a Viksit Bharat.”
Outlining COAI’s submissions for Budget 2026–27, Kochhar said regulatory levies remain a major concern. “For the budget 2026-27, the following issues have been submitted to the Government for their kind consideration: Reduction in Regulatory Levies.” He added, “The License Fee, which is a combination of the License (3% of AGR) and Digital Bharat Nidhi Contribution (5% of AGR), is a huge financial burden for the Licensed Telcos. COAI has requested that the License Fee be reduced from 3% to 0.5% – 1% just to cover the administrative costs.”
On the Digital Bharat Nidhi, he said, “The Digital Bharat Nidhi contribution should be paused for the time till the unused corpus has been completely utilized by the Department of Telecommunications.” Addressing GST-related challenges, Kochhar pointed to the issue of accumulated input tax credit and proposed targeted relief.
“ITC Issues: With a vast sum of money being accumulated in the ecosystem, COAI has recommended the following to help in reducing the Financial Burden and help in providing relief to the sector.” He detailed COAI’s suggestions, stating, “Special benefit may be provided to telecom operators in GST by way of exemption of GST on regulatory payments of LF, SUC and spectrum assigned under auction.”
“As an alternative to the above, COAI has suggested that the rate of GST under Reverse Charge on Spectrum payment, license fees, Spectrum usage charges, etc. can be reduced from the existing 18% rate to the lower rate of 5% slab, since it is revenue neutral to the Government and shall help in reducing ITC Accumulation.”
He further added, “COAI has also suggested that usage of existing ITC balance be allowed for discharging GST under RCM (Reverse Charge Mechanism) on LF/SUC, which will not only protect the cash outflow for telcos but also help in utilizing accumulated ITC.” Summing up the sector’s broader role, Kochhar said, “COAI believes that the fact that since Telecom today is no longer just a vertical, but a ‘horizontal value-added enabler’ for all other verticals, a recalibration of spectrum pricing and assignment models too is necessary.”
Data Protection Enforcement and Compliance Readiness
With enforcement of India’s data protection regime on the horizon, Amit Kumar, Co-Founder and CEO of Redacto.ai, said Budget 2026 must focus on capacity building and practical compliance. “The increased allocation for the Data Protection Board is a positive signal, but the real test will be whether Budget 2025-26 matches the scale of what’s ahead. With enforcement beginning May 2027, the DPB will need substantially more resources for complaint resolution, breach investigations, and penalty adjudication.”
He added that enforcement alone will not be enough. “Beyond enforcement capacity, we need policies that make compliance achievable, not just mandatory. Tax incentives for privacy-enhancing technologies and dedicated support for MSMEs struggling with implementation costs would accelerate adoption far more effectively than penalties alone. Building a culture of data privacy requires investment in both infrastructure and awareness, and this Budget is an opportunity to signal that commitment.”
AI as National Digital Infrastructure
AI leaders are looking to Budget 2026 for a stronger policy and funding push. Ankush Sabharwal, Founder & CEO of CoRover, said AI must now be treated as core infrastructure. “Our expectation from the upcoming Union Budget is that it should treat AI as core digital infrastructure for India’s growth in 2026 and beyond.”
He added, “The government has already taken encouraging steps with IndiaAI and DPI-led innovation, but this is the year to double down with targeted incentives for indigenous LLMs, agentic AI platforms and sovereign AI stacks that are built in and for India’s diverse languages and use cases.”
Sabharwal further said, “We hope to see larger allocations for GPU infrastructure, sandbox environments for regulated sectors, and outcome-based incentives for AI deployments in public services, MSMEs and Bharat-focused solutions. With the right push on talent, compliance, and compute, India can not only democratise AI access for every citizen but also emerge as the world’s applied AI capital in 2026.”
Cybersecurity and Digital Trust
Cybersecurity has emerged as another key theme ahead of Budget 2026. Dipesh Ranjan, Senior Vice President, Sales at Cyble, said India’s digital growth must be matched with stronger cyber resilience. “With India rapidly emerging as a global digital powerhouse, Pre-Budget 2026 presents a vital opportunity to reinforce the nation’s cyber resilience alongside its economic ambitions.”
He warned of rising risks, stating, “The rapid rise in AI, Cloud, and Digital public Infrastructure have made cyber threats more than just IT threats and created a risk to the nation’s economy as well as its security.” Ranjan said industry expects, “Investment in Advanced Threat Intelligence, AI based Cybersecurity Platforms and greater Public-Private Partnerships will be at the top of Budget 2026.”
He added, “Investment in Cyber Skill Development and Awareness Programs will also be essential in ensuring that businesses, government agencies and citizens, are able to identify and mitigate evolving digital threats. A Cybersecurity Framework in Budget 2026 will build investor confidence and increase India’s global competitiveness for Digital Trust & Security.”
Fintech Seeks Infrastructure-Led Growth
Fintech leaders are urging policymakers to recognise the sector’s systemic importance. Rohit Mahajan, Founder and Managing Partner at plutos ONE, said fintech must be viewed beyond the startup lens. “Fintech should be embraced as the backbone of the country’s economy, rather than simply as ‘a startup’.” Highlighting the scale of digital payments, he said, “With over 12 billion monthly UPI transactions and digital payments representing more than 75 per cent of the total retail transaction volume, we have now reached a point where our focus must be on strengthening core rail infrastructure (NPCI, Bharat Connect, BBPS) through increased investment in resiliency, cyber security and interoperability.”
He added, “Supporting micro, small and medium enterprises (MSMEs) and the rest of the Bharat through invoice-based, data-led financial products is key to the success of plutos ONE. A budget that looks forward, will provide opportunity for Indian fintech companies to become a global player, but will also prepare the domestic market for new fintech products.”
BFSI Calls for Long-Term Digital Foundations
For the BFSI sector, Budget 2026 is expected to set the tone for sustained digital transformation. Anurag Jain, Founder and CEO of Oriserve, said the sector is entering a new phase: “As India moves into Budget 2026, BFSI enterprises are entering a phase where scale, compliance, and efficiency must grow together.” He added, “With rising transaction volumes and increasing regulatory expectations, the focus should shift from short-term automation incentives to long-term digital infrastructure.”
Jain said, “We expect the upcoming budget to strengthen support for enterprise AI adoption in regulated sectors, particularly around data security, indigenous language technology, and responsible automation.”
He further noted, “Clear policy direction on AI governance, incentives for India-first R&D, and investments in digital public infrastructure will be critical. For BFSI institutions, technology must now operate as core infrastructure rather than experimentation, enabling faster customer engagement, lower operational costs, and stronger compliance. Budget 2026 has the opportunity to accelerate this transition meaningfully.”
