Kumar Mangalam Birla Chairman, Aditya Birla Group  | Photo Credit: PTI

The backdrop to this Budget was hardly forgiving. India entered the year with strong domestic momentum, yet the global environment was clouded by trade frictions, geopolitical tension and rising energy risks. Fiscal space, too, was not limitless, with tax buoyancy softer than expected. In that setting, the decision to stay the course on fiscal consolidation while stepping up capital expenditure provided the stability from which industrial policy could operate with credibility. Government capex outlay has increased to ₹12.2 lakh crore from ₹11.21 lakh crore. The government has also rolled out a slew of schemes and initiatives to propel the manufacturing industry in India to greater heights.

The FM has correctly identified investment in manufacturing as key to sustaining economic growth. She has deftly used the combination of tax reforms and customs duty rationalisation to provide targeted initiatives to sectors ranging from biopharma to heavy industry. The selection of biopharma as a crucial sunrise sector deserving of government attention is praiseworthy. The FM contextualised her proposals by pointing to the rise in incidents of lifestyle/non communicable diseases in the country and the dangers it poses to society’s health and economic output. The allocation of ₹10,000 crore under Biopharma SHAKTI over five years signals a long-term commitment to building capacity in biologics and biosimilars.

Electronics push

The semiconductor and electronics push follow a similar logic. Upgrading the India Semiconductor Mission to cover equipment, materials and design broadens the industrial base beyond fabrication and assembly. The expansion of the Electronics Component Manufacturing Scheme corpus reinforces this direction. Components and materials determine how much value a country captures in global electronics supply chains. Building these layers reduces import dependence, shortens supply chains and enhances resilience at a time when electronics trade is increasingly shaped by strategic considerations.

 The Budget also recognises that advanced manufacturing rests on precision engineering. Hi-tech tool rooms and a scheme for construction and infrastructure equipment strengthen the capital goods backbone. Tooling and high-precision components are the hidden multipliers of industrial productivity, supporting sectors from automotive to heavy engineering. The dedicated outlay for container manufacturing reflects an appreciation of logistics hardware as part of industrial capacity. Containers, often overlooked, are critical to trade flows and supply chain security.

Textiles, long a mainstay of employment, receive a comprehensive upgrade. Covering fibres, cluster modernisation, sustainability, handicrafts and skilling, the integrated programme aims to reposition the sector for a more competitive global environment. With market access prospects improving and global buyers diversifying sourcing bases, modernisation of clusters and testing facilities can translate into better quality, compliance and export readiness. For a labour-intensive industry, productivity gains have broad social impact.

Dispersed manufacturing

A parallel effort to rejuvenate legacy industrial clusters underscores a commitment to dispersed manufacturing. These clusters anchor employment in smaller towns and semi-urban regions. Upgrading infrastructure and technology in such ecosystems connects them more effectively to national supply chains and export markets, broadening the base of industrial growth.

Financial architecture complements production initiatives. Strengthening receivables financing through the Trade Receivables Discounting System, along with credit guarantees and securitisation, addresses working capital constraints that often limit expansion for smaller manufacturers. Faster cash cycles and improved liquidity can accelerate investment in technology and scale.

Infrastructure policy reinforces the manufacturing thrust. Freight corridors, waterways and coastal shipping reduce logistics costs, a persistent drag on competitiveness. A framework to mitigate construction-phase risk in infrastructure projects helps crowd in private capital, speeding up the build-out of networks that industry depends on.

Taken together, these measures signal a shift from episodic incentives to ecosystem building. Manufacturing competitiveness rests on reliable inputs, efficient logistics, skilled manpower and access to finance. The Budget engages each of these levers in a coordinated manner.

The writer is the Chairman, Aditya Birla Group 

Published on February 1, 2026