As the Union Budget 2026 draws closer, expectations are mounting on how the government will navigate robust domestic growth amid an increasingly uncertain global environment. According to experts, a key challenge for Budget 2026 will be managing currency volatility amid tariff risks.  

Economists said the next challenge lies in ensuring growth translates into job creation, higher wages, and improved rural demand while also protecting the economy from external shocks. 

Highlighting the priorities, Dr. Partha Chatterjee, Dean of Academics and Professor of Economics at Shiv Nadar University, Delhi-NCR, said, “Strong headline growth and lower inflation are welcome, and the budget must preserve that. With GDP growth looking robust, the real test is improving the quality of growth: jobs, wages, and rural demand, so the benefits are durable and widely shared. The budget must recognise that we live in a very uncertain world, and it should insure the economy against uncertainty.” 

According to Chatterjee, the central challenge for the Budget is currency volatility amid tariff risks. “The central challenge for Budget 2026 is uncertainty—currency volatility, shifting capital flows, tariff risks, and inflation spillovers. The Budget should insure the economy against uncertainty both at the macro level and micro level by building macro-resilience in an uncertain world and reducing the cost of risk for producers and exporters, particularly for the MSMEs. The Budget should also incentivise channelling of patient capital to long-term projects,” he said. 

Experts said the current phase of the growth needs to be strengthened at the grassroots level. While consumption in urban centres has remained resilient, rural demand has been uneven, and employment generation continues to lag output growth. As per experts, targeted spending on agriculture, rural infrastructure, and labour-intensive sectors could help make growth more inclusive. 

Analysts warn external risks cannot be ignored 

At the same time, analysts cautioned that external risks remain significant and cannot be overlooked. Global interest rate movements, currency volatility, geopolitical woes, and shifting trade policies pose ongoing hurdles for the emerging markets. In this context, many economists believe the Budget should focus on building buffers at the macro level while also lowering risks for businesses, especially small and medium enterprises that are more vulnerable to shocks. 

There is also growing emphasis on attracting long-term, patient capital into infrastructure, manufacturing, and clean energy. Experts said such investments can improve productivity, create jobs, and make growth more resilient over time.