A Budget for India’s strategic growth and competitiveness

The document will be pivotal in outlining an agenda that sustains growth and capex, enhances manufacturing and technological capabilities, creates jobs, and makes our economy more dynamic and competitive

- RAJIV MEMANI

India continues to demonstrate resilience amid heightened global uncertainties. With the growth projection of 7.4 percent in the financial year 2025-26 (FY26), it is the world’s fastest-growing large economy for the third year in a row.

Beyond stable macroeconomic fundamentals, this growth has been driven by reforms, cuts in rates of income tax, and goods and services tax, and monetary easing, including a cumulative 125-basis point reduction in the repo rate. The government has also done well to forge new economic partnerships to diversify trade and strengthen supply chains.

As we turn to the Budget this year, the scope for significant tax breaks or raising tax revenues is limited. Growth in gross tax revenues has been muted and there is a need to continue fiscal discipline. The central and state governments must continue their focus on reforms to ensure greater ease of doing business and more competitive factor markets. Growth in public capex must be sustained. Though private capex has been growing, it has been impacted by global uncertainties and the threat of dumping by other countries.

Against this backdrop, I lay down a few areas and sectors that could act as strategic levers to turbocharge the economic engine in 2026.

India’s sizeable manufacturing imports, estimated at over $450 billion, present both a risk and an opportunity. The Budget could announce policies and schemes that facilitate maximum value addition within the country and reduce imports, especially for products that expose India to disruption in external supply chains.