Union Budget 2026: The Union Budget 2026 turns around the corner. I personally believe this budget can be a turning point for new car buyers and the car manufacturing industry. At Business Pulse Care, we’ve analysed the trends to bring you the most likely changes.”
Table of Contents
Union Budget 2026: 1. FAME-III Scheme: The Future of EV Subsidies
The entire automobile sector is eyes-wide-open for the announcement of the FAME-III scheme. With FAME-II having concluded, the industry expects a renewed commitment to electric mobility. If the government allocates a higher budget for EV subsidies, we could see a significant drop in the prices of electric two-wheelers and cars, making them more accessible to the middle class.
2. GST Reduction on Hybrid Vehicles
Currently, hybrid cars are taxed at a high rate of 43% (including cess), which is nearly at par with luxury petrol cars. Industry giants like Toyota and Maruti Suzuki have been advocating for a tax cut. A reduction to 12% or 18% would not only boost sales but also provide a bridge for consumers moving from ICE (Internal Combustion Engine) to full EVs.
3. Scrappage Policy Incentives
To tackle rising pollution, the government might introduce more aggressive incentives for the Voluntary Vehicle Fleet Modernisation Program (Scrappage Policy). Business owners are hoping for direct tax rebates or discounts on new vehicle purchases against scrappage certificates to encourage the removal of old, polluting vehicles from Indian roads.
4. Standardising Charging Infrastructure
For India to become an EV-first nation, the 2026 Budget must focus on infrastructure. We expect an announcement regarding tax sops for companies setting up “Fast Charging Hubs” along national highways. This move would directly address the ‘range anxiety’ that prevents many Indians from switching to electric.
Union Budget 2026: 5. PLI Scheme Extension for Auto Components
To make India a global manufacturing hub, the Production Linked Incentive (PLI) scheme needs a boost. An extension would help local manufacturers produce advanced automotive components domestically, thereby reducing our dependency on imports and ultimately lowering the production cost of Made-in-India cars.
| Expectation | Potential Impact |
| FAME-III Launch | Cheaper Electric Vehicles |
| GST Cut on Hybrids | High Demand for Hybrid SUVs |
| Scrappage Rebates | Faster Fleet Renewal |
| Infra Tax Sops | More Charging Stations |
Expert Analysis: What it Means for You?
At Business Pulse Care, we believe that while the government is focused on ‘Green Mobility,’ the immediate relief might come in the form of subsidised loans for EVs. If you are planning to buy a car, waiting until February 1st might save you anywhere between ₹50,000 to ₹2,00,000.
Conclusion: Union Budget 2026
The Union Budget 2026 will be the roadmap for India’s “Green Revolution” on wheels. Whether you are a business owner or a retail buyer, these 5 areas will decide the hole in your pocket for the next financial year.
The Indian #Sugar and Bio-energy Manufacturers Association urged #GST rationalisation and targeted policy support for biofuels ahead of the 2026-27 union budget to cut emissions, #curboil imports and support farmers.
— Informist Media (@InformistMedia) January 14, 2026
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Jay Chavda He is the Founder and Writer of businesspulsecare.com. He is an I.T Engineer, Freelancer, Businessman. He posts Business, Stock/Share Market, Finance Related News and updates on the website. 🔗