India’s next leg of economic expansion will hinge on sustained investment from public, private, and foreign sources, according to the Confederation of Indian
Industry (CII). In its recommendations for the Union Budget 2026–27, CII said the Budget must strike a careful balance, acting as a stabilising force while also accelerating long-term growth. CII emphasised that government spending has played a crucial role in supporting India’s recovery in the post-pandemic period and should continue to do so. CII Director General Chandrajit Banerjee underlined the need to maintain this momentum to ensure India remains among the world’s fastest-growing major economies. To this end, CII proposed increasing central capital expenditure by 12 per cent in FY27, along with a 10 per cent rise in financial support to states. The industry body recommended directing these funds toward high-impact sectors such as transport infrastructure, energy, logistics, and the green transition. It also suggested introducing a Capital Expenditure Efficiency Framework to improve project selection, monitoring, and outcome measurement. Long-Term Infrastructure Vision And Fiscal Flexibility Providing long-term certainty to investors is another priority flagged by CII. The body proposed launching a fresh National Infrastructure Pipeline worth Rs 150 lakh crore for the 2026–32 period, aimed at offering clear visibility on upcoming projects for both states and private players. CII also called for a more adaptive fiscal approach. Instead of rigid annual deficit targets, it suggested adopting a debt-based framework that adjusts with economic cycles. According to CII, such flexibility would allow the government to respond more effectively to economic shocks while preserving fiscal discipline over the long run. Private And Foreign Capital As Key Growth Engines Highlighting the need for stronger private sector participation, Banerjee said, "The Government of India 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." To encourage this, CII recommended offering tax credits or simplified compliance for companies that expand capacity or production. It also proposed bringing back accelerated depreciation to support modernisation, particularly for MSMEs. On foreign investment, CII suggested setting up an NRI Investment Promotion Fund with partial government participation to channel long-term capital into sectors like infrastructure and artificial intelligence. Strengthening the National Investment and Infrastructure Fund through a Sovereign Investment Strategy Council was also proposed. In addition, CII called for simpler external borrowing norms, a single-window clearance system for large FDI proposals, and the creation of an India Global Economic Forum to facilitate structured dialogue with global investors. Summing up the approach, Banerjee said, "An investment-driven growth strategy, anchored in fiscal credibility and institutional reforms, will define India's next development phase."
