Budget 2026 comes at a time when significant government actions have helped insulate India from global and geopolitical uncertainties. Over the years, the budget has not only signalled policy intent, but enabled reforms that have been effectively implemented on the ground. Today, India has the opportunity to consolidate these gains and accelerate into the next phase of growth by developing measurable outcomes and effective delivery mechanisms.
Changes to the personal income tax regime announced in last year’s budget have been a game-changer. Further, the GST reforms of September 2025 simplified a complex system. GST collections doubled from ₹11.37 lakh crore in FY21 to ₹22.08 lakh crore in FY25, while the taxpayer base expanded from 66.5 lakh to over 1.5 crore. This is not merely revenue growth, but clear evidence of deeper formalization of the economy.
Infrastructure investment rose 11% last year to ₹11.11 lakh crore, maintaining capital expenditure at 3.4% of GDP. As this scale of spending continues, the emphasis must shift from capacity creation to debottlenecking and efficiency gains. The PM Gati Shakti data announced in the last budget is now visible to investors and users, providing a powerful planning tool to identify where removing bottlenecks can deliver the quickest and highest returns across ports, airports, their connectivity, and build the first- and last-mile logistics networks. As India integrates more deeply into global supply chains, access to long-term capital becomes critical. Last year’s budget provisioned a ₹1 lakh crore fund for R&D and innovation, now being operationalised, enabling Indian companies to acquire overseas intellectual property, technology and R&D capabilities. To build on this, a complementary mechanism to enable Indian firms to acquire manufacturing capacity overseas and become part of global value chains could be achieved through a dedicated sovereign-backed vehicle, or by creating a focused fund under the National Investment and Infrastructure Fund. Such a platform would allow Indian companies to acquire/partner with overseas suppliers/manufacturing capacities to make components that feed into products sold worldwide. Once integrated into global supply chains, the Indian arm of these companies will directly stand to benefit. For example, India’s share of the global automotive aftermarket is roughly $3 billion out of an estimated $300 billion market size, indicating significant headroom for expansion.
Employment generation must remain central to Budget 2026. The Employment Linked Incentive (ELI) scheme announced last year provides a strong foundation by linking job creation with formalization and skilling. This year’s budget must continue this focus and encourage deeper participation by industry and training institutions in skilling, upskilling and certification. Sectors such as logistics and tourism merit priority. Manufacturing competitiveness cannot improve without upskilling the logistics sector, and the sector already employs an estimated 20–22 million people and can add several million more as infrastructure, warehousing and multimodal transport expand, while tourism supports over 40 million jobs directly and indirectly, offering high employment multipliers for youth and semi-skilled workers. Focused certification and upskilling through National Skill Training Institutes (NSTIs), with a clear target of enabling at least 100,000 jobs in these sectors, would translate policy intent into measurable outcomes.
Micro, small and medium enterprises (MSMEs) continue to be the backbone of job creation, supported by multiple schemes with significantly increased funding. A coordinated cross-functional collaboration with industry bodies (such as CII) and sectoral Centres of Excellence can improve connect with MSMEs, align initiatives more closely to enable large corporates to support MSMEs and translate policy intent into measurable growth, livelihood and employment outcomes.
Policies need to be evaluated through two lenses: the ease of doing business and the cost of doing business. As India becomes more deeply integrated into the global economy, it is important for the budget to signal intent on benchmarking processes such as mergers, demergers and acquisitions against global best practices, with the aim of achieving world-class timelines. Recent references by the finance minister to customs and trade facilitation reforms are welcome, particularly as global supply chains continue to reconfigure. The budget has to not only look at rate rationalization but also deeper digitization and technology-led processes that speed up approvals and clearances, which would significantly strengthen India’s competitiveness.
The finance minister has already set a record by presenting eight consecutive budgets of far-reaching consequence. I am confident that Budget 2026 will decisively advance India’s journey towards a Viksit Bharat, carrying forward the aspirations of the entire society in an equitable and inclusive manner.
R. Dinesh is the executive chairman of TVS Supply Chain Solutions and former president (2023-24) of the Confederation of Indian Industry.
