With the Union Budget 2026 just weeks away, India’s investor community is speaking with one voice: it’s time for smarter, not heavier, regulation. At the heart of their demand? A streamlined framework for accredited investors—and a surprising plea to shift focus away from angel investors toward the far riskier world of Futures & Options (F&O) trading.
Contrary to popular perception, many market experts argue that angel investing is a force for good—fueling innovation, startups, and long-term capital formation. Meanwhile, the largely unregulated speculative frenzy in F&O markets poses a greater systemic threat. Yet, current policy discussions continue to target early-stage funders while leaving high-leverage derivatives relatively untouched.
Table of Contents
- Why Accredited Investors Matter for India’s Growth
- Key Investor Demands for Union Budget 2026
- F&O vs. Angel Investing: A Misplaced Regulatory Priority?
- What Global Markets Do Differently
- Conclusion: Time for a Balanced, Growth-Oriented Approach
- Sources
Why Accredited Investors Matter for India’s Growth
Accredited investors—high-net-worth individuals or institutions deemed financially sophisticated by regulators—are critical to deepening India’s capital markets. They provide patient capital to startups, private equity funds, and alternative investment vehicles that traditional banks often avoid.
Currently, SEBI defines an accredited investor as someone with a net worth of ₹5 crore (excluding primary residence) or annual income of ₹2 crore. While this threshold aims to protect retail investors, critics say the compliance burden is excessive. Documentation, periodic re-certification, and fragmented eligibility criteria across asset classes create friction that stifles participation .
“A uniform, simplified policy for accredited investors would unlock billions in domestic capital,” says financial policy analyst Rohan Desai. “Right now, we’re making it harder for qualified Indians to invest in their own economy.”
Key Investor Demands for Union Budget 2026
As the government finalizes its fiscal roadmap for FY27, here’s what the investment community wants to see in the Union Budget 2026:
- Single-window accreditation: One-time verification valid across all SEBI-regulated products (AIFs, PMS, private placements).
- Lower documentation burden: Accept self-declaration backed by audited ITRs instead of repeated bank/CA certifications.
- Clarity on tax treatment: Harmonize capital gains rules for accredited vs. retail investors to avoid ambiguity.
- Defer angel tax scrutiny: Focus enforcement on actual fraud, not legitimate startup funding.
- Review F&O market risks: Introduce position limits, margin safeguards, and investor education for retail F&O traders.
F&O vs. Angel Investing: A Misplaced Regulatory Priority?
One of the most striking arguments emerging ahead of the Union Budget 2026 is this: why scrutinize angel investors when F&O markets are far more volatile and prone to manipulation?
Data from the National Stock Exchange (NSE) shows that over 85% of retail F&O traders lose money within a year—many wiping out their entire capital due to high leverage and lack of understanding . In contrast, angel investments, while risky, are typically long-term, illiquid, and made with full awareness of potential losses.
“Angel investing drives capital formation. F&O speculation often leads to capital destruction,” notes venture capitalist Anjali Kapoor. “Regulators should be encouraging the former, not treating it like a tax evasion scheme.”
What Global Markets Do Differently
Countries like the U.S., Singapore, and the UAE have robust accredited investor frameworks that balance access with protection:
- The U.S. SEC allows accreditation based on professional credentials (e.g., CFA, CPA) in addition to income/net worth.
- Singapore’s MAS offers tiered access—higher-risk products only to verified sophisticated investors.
- Dubai’s DIFC uses a centralized registry, reducing duplication and speeding up onboarding.
India could adopt similar models. For deeper insights, explore the SEBI website on investor classification or our guide on [INTERNAL_LINK:how-to-become-an-accredited-investor-in-india].
Conclusion: Time for a Balanced, Growth-Oriented Approach
The Union Budget 2026 presents a golden opportunity to modernize India’s investment ecosystem. By easing entry for accredited investors and redirecting regulatory attention toward genuinely risky activities like unchecked F&O trading, the government can foster innovation without compromising stability. After all, the goal isn’t just to collect more taxes—it’s to build a financial system where smart capital flows freely to fuel tomorrow’s growth.
Sources
- Times of India: “Investors’ expectations from Union Budget 2026” (January 2026)
- Securities and Exchange Board of India (SEBI): Guidelines on Accredited Investors (2023)
- National Stock Exchange (NSE): Retail Participation and Loss Statistics in F&O Segment (2025)
- Interviews with industry experts and venture capital firms (on-record statements, January 2026)