Budget 2026: Reform over rhetoric resonates with industry

Budget 2026-27 is a defining statement of continuity, credibility, and confidence. It reaffirms India’s commitment to stability, prudence, and reform-led growth with the overarching theme of Viksit Bharat. The ninth consecutive Budget presented by Finance Minister Nirmala Sitharaman consolidates the nation’s economic gains of the past decade and pivots towards the next phase of transformation. Its underlying principle of “reform over rhetoric” resonates deeply with industry.

India enters FY27 on a strong macroeconomic footing. According to the first advance estimates, GDP growth is pegged at 7.4% for FY26 while the Economic Survey projects growth in the 6.8-7.2% range for FY27—outpacing peers and reaffirming India’s position as the fastest-growing major economy for a fourth consecutive year.

Against the backdrop of geopolitical tensions and slowing global trade, the continued prudent fiscal management stands out as a strong policy anchor. The government’s adherence to fiscal consolidation, maintaining the fiscal deficit at 4.4% of GDP in FY26 while projecting it at 4.3% of GDP in FY27, together with calibrated capex expansion budgeted at Rs 12.2 lakh crore in FY27, will strengthen market confidence and sustain momentum in both public and private investment cycles.

CII on the budget

CII commends the Budget’s balanced approach—maintaining the growth-enabling role of public investment while deepening fiscal transparency and ensuring medium-term stability. For the industry, the continuity in macro strategy provides a stable horizon for planning investments and expansion.

What stands out is the explicit move from focusing merely on the scale of spending to more on quality of preparation. The focus on sector-specific skilling proposals, frontier technologies, and manufacturing road map for strategic areas like rare earth metals will help convert physical assets into sustained productivity gains.

The FM’s six intervention areas—scaling up manufacturing in seven strategic and frontier sectors, rejuvenating legacy industrial sectors, creating champion MSMEs, delivering a powerful infrastructure push, ensuring long-term security and stability, and developing city economic regions—form a coherent industrial and spatial strategy.

This tiered approach signals a maturing industrial policy that focuses on resilience and competitiveness instead of blanket self-reliance.

Similarly, the proposal to set up a high-level committee on banking for Viksit Bharat, to review and align the sector with India’s next phase of growth—while safeguarding financial stability, inclusion, and consumer protection—is a welcome step towards preparing financial markets for the next leap of transformation.

MSME play

For MSMEs, the three-pronged approach of “equity-liquidity-professional support” comes at a time when they face both opportunity and pressure from shifting supply chains, emerging technologies, and changing trade dynamics. Championing MSMEs through funding, ample liquidity, and handholding support through Corporate Mitras are welcome steps to translate opportunities into broad-based growth.

On taxation, the shift towards a trust-based, non-adversarial regime is noteworthy. The proposal to grant immunity from penalty and prosecution in cases of misreporting of income provides taxpayers with a safe opportunity to correct disclosures. The decriminalisation of offences relating to non-production of books of account and documents, as well as certain TDS-related defaults, is a welcome step and aligns with long-standing industry representations for rational laws on criminalisation.

The articulation of three kartavyas of the government—to accelerate and sustain growth with resilience, to build people’s capabilities and aspirations, and to ensure sabka saath, sabka vikasthrough equitable access to infrastructure and opportunity—offers a normative frame for policy. Delivering on these national priorities demands institutional capacity, private sector participation, and policy consistency, all of which this Budget reinforces.

The significance of Budget FY27 lies less in any single announcement and more in the coherence of its message. It is a reform-driven, stability-focused Budget that prioritises long-term growth and seeks to build competitiveness, productivity, and fiscal resilience.

Note: This article was first published in FINANCIAL EXPRESS