What Gen Z expects from Budget 2026: From better public healthcare to lower STCG tax

Exposure to geopolitical uncertainties, climate risks and a highly competitive job market has significantly raised Gen Z’s expectations from public policy.

According to the Deloitte 2025 Global Gen Z and Millennial Survey, 36% of Gen Z individuals in India report feeling stressed or anxious all or most of the time.  

To understand what younger Indians expect from the Union Budget 2026, I reached out to multiple Gen Z respondents aged between 20 and 25 years. Surprisingly, their expectations are much more than the usual tax reforms and better employment opportunities. 

Let’s dig into what Gen Z is expecting from the government this year. 

Healthcare and mental health

Access to affordable and reliable healthcare is a key concern: Visible gaps in public healthcare infrastructure, quality of services and long waiting times, especially in government hospitals, significantly limit effective care for a large section of the country’s population. 

“Increasing budgetary allocation is needed, but it’s not enough unless it results in better facilities and accountability on the ground,” said Ishita Bhalla, 22, an MBA student at IIM Indore. “Young people are looking for public hospitals that are functional, transparent and accessible.”

In India, the allocation for public healthcare remains around 2% of GDP, which is lower than in many emerging economies. In the Union Budget 2025-26, ₹99,859 crore was allocated for the Ministry of Health and Family Welfare, representing 1.97% of the total budget. 

There is also a demand for better mental health management services, particularly in the current geopolitical scenario. According to the National Mental Health Survey (NMHS), 10.6% of adults in India suffer from mental disorders. 

“There’s a clear need for mental health services to be treated as essential healthcare,” Bhalla said, highlighting the need for counselling services in educational institutions and affordable treatment options for young professionals. 

Affordable female hygiene products

One major expectation is the affordability of essential hygiene products, like sanitary napkins. While awareness around menstrual health has improved over the years, access and affordability remain limited in both urban and rural areas. 

According to NFHS-5 data (2019–21), 77.3% of women aged 15-24 in India use hygienic menstrual protection methods, up from 57.6% in NFHS-4. Even with the increase, growth is limited, and affordability continues to be a major hindrance. 

“There should be a stronger push to reduce the final retail price of sanitary napkins,” said Anisha Sen, 22, a brand specialist at an art gallery. “This could be achieved through wider distribution through health schemes and support to manufacturers so costs don’t get passed on to consumers.”

Education and infrastructure

In the current job market, employment challenges are linked to gaps in education quality and infrastructure. There is a dire need for better-equipped institutions, modernised classrooms and practical skill-building opportunities. 

“Degrees no longer guarantee jobs, and the system hasn’t fully caught up with the real situation of the job market,” said Archit Agarwal, 25, an MBA student at IIT Delhi. “There is a need to focus on upgrading educational infrastructure and training, such as AI skilling campaigns, that can help bridge the gap between education and employability.”

With overcrowded metro cities, poor conditions of public transport and rising commuting costs, improved urban planning is crucial to support a growing workforce.

Taxation and standard deduction

Recent changes in taxation, mainly the higher standard deduction announced in 2024, have eased the burden on salaried individuals. 

“The increase in the standard deduction in 2024 brought a big difference to take-home pay,” said Dakshta Gautam, 22, an MSc Economics student at BASE, Bengaluru. “Young taxpayers now want predictability and simpler tax rules.”

Beyond tax slabs, the compliance challenges faced by first-time filers, freelancers and gig workers are still a concern. Gen Z now expects to see inflation-adjusted tax slabs and smoother and clearer compliance rules for all.

Short-term capital gains

Gen Z is increasingly participating in the equity markets and raising concerns about the taxation of short-term capital gains (STCG). Many respondents expressed their hopes to see the rationalisation of STCG at a lower rate. 

“For students and first-time investors, high STCG can act as a demotivating factor,” said Tanmay Arora, 20, a BCom (Hons) student at Delhi University. There’s an expectation that the structure could be rationalised to encourage long-term participation by lowering the STCG.

Climate governance and anxiety

Climate-related concerns were noted in several responses, as many respondents brought attention to worsening air quality, extreme weather in India and environmental degradation.

In 2025, India consistently recorded high AQI in major cities. Even now, AQI in major Indian cities frequently exceeds WHO safe limits by 5-10 times, according to the WHO Air Quality Database. 

“There’s a sense of constant climate anxiety, especially when Indian cities repeatedly cross safe air quality limits,” said Suyash Gupta, 22, a data analyst at a software firm. “What people want is visible action, not just targets and announcements. Changes on the ground can increase trust and help with constant anxiety around climate change.”

Gen Z expects stronger climate governance and accountability, which is more than just announcements. 

“Higher budgetary allocations for renewable energy, climate-resilient infrastructure and stricter enforcement of environmental norms can bring real change,” Gupta added. 

Defence and space sector

Some respondents also highlighted the importance of increased investment in defence and space research.

“Stronger defence capabilities and ambitious space missions are important for the country’s development,” said Arnav Singh, 22, a BTech computer science graduate from Manipal University. “Increased allocations for defence R&D and ISRO projects can also generate high-skilled job opportunities as well.”

Other expectations

Some other expectations in brief, maintaining the collective sentiment, were:

• Financial literacy awareness programs 

• Reforms to lower the cost of living and control inflation

• Better wages and working conditions for gig workers

• Benefits for young entrepreneurs, such as more schemes offering easier access to credit and tax incentives