Budget Needs To Act As Both A Stabiliser And Growth Driver: CII
The Union Budget for the 2026-27 fiscal year is expected to be presented on February 1. The CII also said that reinforcing fiscal stability through an economic-cycle-based public debt framework, in place of inflexible annual deficit rules, would also enhance resilience by allowing counter-cyclical flexibility
New Delhi: As part of pre-budgetary exercise, leading industry body Confederation of Indian Industry (CII) on Sunday laid out a detailed roadmap for the Union Budget 2026-27, saying that the Budget needs to act as both a stabiliser and a growth driver. “India's next phase of economic growth would depend on steady and strong investment across public, private, and foreign channels,” the CII said.
In its proposal, the industry lobby also proposed a comprehensive set of reforms for the forthcoming Union Budget to drive sustained investment growth spanning public, private, and foreign investments and maintain India's momentum as one of the world's fastest-growing major economies.
“The government needs to increase central capital expenditure by 12 per cent and capex support to states by 10 per cent in FY27. Besides, it should launch a Rs 150 lakh crore National Infrastructure Pipeline (NIP) 2.0 for 2026-32, offer incremental tax credits or compliance relaxations for firms achieving significant new investment, production, or tax contribution milestones and establish an NRI investment promotion fund as well,” the CII suggested.
The CII also called for reinstating accelerated depreciation benefits to further incentivise fresh capital expenditure and technology upgrades, particularly for MSMEs and manufacturing industries, provided the measure is structured to stimulate modernisation without triggering minimum alternate tax (MAT) obligations. “Also, the government should strengthen the National Investment and Infrastructure Fund (NIIF) by forming a Sovereign Investment Strategy Council (SIFC) to align investments with national priorities,” it said.
The Union Budget for the 2026-27 fiscal year is expected to be presented on February 1. The CII also said that reinforcing fiscal stability through an economic-cycle-based public debt framework, in place of inflexible annual deficit rules, would also enhance resilience by allowing counter-cyclical flexibility during global shocks and avoiding repeated breaches of yearly targets. “Such a framework would strengthen credibility by aligning fiscal policy with medium-term debt sustainability,” it said.
However, CII director general Chandrajit Banerjee also said that the forthcoming Union Budget 2026-27 has to serve the dual role of stabiliser and growth enabler, and promoting investments will be one of the most critical components in this regard. The government has provided a big demand push via income tax relief in last year's Union Budget and recently via GST 2.0. Investments, especially private sector investment, will be the next big driver for economic growth that needs to be focused on in the next fiscal to continue the growth momentum,” Banerjee added.
In this context, the CII also said that incremental tax credits or compliance relaxations for firms achieving significant new investment, production, or tax contribution milestones will encourage reinvestment of profits into productive assets and the scaling of capacity in high-growth sectors such as clean energy, electronics, semiconductors, and logistics.
