There is a familiar proverb that says, “The journey matters as much as the destination.” India’s Union Budget 2026–27 reflects this philosophy well. It is not merely a collection of announcements, but a continuation of a reform journey what is aptly described as the Reform Express, steadily moving India from aspiration to achievement and from potential to performance.
This Budget can be viewed through five key pillars identified by Assocham — Make in India, Ease of Doing Business, MSME Growth, Digital Economy, and Sustainability & Environment. Importantly, Budget 2026–27 delivers meaningfully across each of these pillars, reflecting a constructive alignment between policy priorities and industry feedback.
At a time when the global economic environment is marked by uncertainty, fragmented supply chains and rising geopolitical risks, the Budget sends a reassuring signal of stability, continuity and confidence. It reinforces the government’s commitment to growth through public investment, structural reforms and inclusive development.
One of the strongest pillars of the Budget is the continued emphasis on public capital expenditure as the backbone of the Make in India strategy. Over the past decade, public capex has increased more than fivefold, rising from around ₹2 lakh crore in 2014–15 to ₹11.2 lakh crore in 2025–26. In Budget 2026–27, this has been further raised to ₹12.2 lakh crore.
The Budget places strong emphasis on MSMEs as engines of growth, exports and employment. | Photo Credit: PICHUMANI K
This sustained investment push reflects the government’s belief in infrastructure as a growth multiplier. Allocations across transport, urban development, power and logistics-linked infrastructure underscore the role of public spending in crowding in private investment, creating jobs and improving productivity.
Assocham has consistently emphasised the importance of predictability in public investment. The continued capex momentum responds to this need and strengthens confidence in India’s manufacturing and infrastructure growth trajectory.
The Budget speech highlights that over 350 reforms have been undertaken in recent years, spanning GST simplification, labour codes, quality standards and compliance rationalisation. Budget 2026–27 builds on this momentum rather than resetting the agenda.
Incremental but meaningful reforms continue through simplification of tax laws, time-bound dispute resolution mechanisms, and reduced compliance friction. The move towards a new Income Tax framework, faster Advance Pricing Agreements and rationalisation of transaction-related taxes reflects industry feedback on the need for certainty and efficiency.
From Assocham’s standpoint, such reforms are critical in translating entrepreneurial intent into executable business decisions. The Reform Express is clearly not slowing down, it is, in fact, gathering pace.
The Budget places strong emphasis on MSMEs as engines of growth, exports and employment. A key announcement is the ₹10,000 crore SME Growth Fund, aimed at supporting scale-up and job creation.
Equally important is the Budget’s three-pronged MSME approach of equity support, liquidity support and professional support, recognising that sustainable MSME growth requires more than access to credit alone.
Liquidity measures include further strengthening of the Trade Receivables Discounting System (TReDS), mandating its use for CPSE purchases, providing credit guarantee support for invoice discounting, linking GeM with TReDS, and enabling securitisation of receivables. These steps directly address working capital constraints and delayed payments which are long-standing concerns raised by the industry.
The Budget reinforces the role of the digital economy as a driver of productivity, services-led growth and employment. The proposed Education-to-Employment and Enterprises Committee seeks to align skills with emerging market needs, particularly in services and technology-enabled sectors.
The Budget reinforces the role of the digital economy as a driver of productivity, services-led growth and employment. | Photo Credit: Supatman
A significant industry-positive measure under this pillar is the tax holiday extended till 2047 for foreign companies offering global cloud services using Indian data centres. This provides a strong incentive for investment in digital infrastructure, positioning India as a competitive hub for data centres, cloud services and digital platforms.
Assocham has consistently advocated greater focus on digital infrastructure and services competitiveness. The Budget’s approach supports this vision by combining skilling, services growth and digital investment incentives.
The Budget integrates sustainability firmly into the growth framework. The ₹20,000 crore Carbon Capture, Utilisation and Storage (CCUS) programme targets hard-to-abate sectors such as power, steel, cement and chemicals, enabling emissions reduction while supporting industrial activity.
Complemented by continued investments in clean energy, efficient transport systems and green infrastructure, the Budget reflects a balanced approach, recognising that economic expansion and environmental responsibility must progress together.
Overall, Budget 2026–27 reflects a constructive policy dialogue between government and stakeholders. Several Assocham recommendations have found resonance in the Budget’s design and priorities.
However, this does not imply that all challenges have been resolved. Execution, coordination across levels of government and timely implementation will determine outcomes. Still, the direction of policy is clear and aligned with the needs of a growing economy.
Overall, Budget 2026–27 reinforces the idea that reform is a journey, not a destination. By delivering across the five Assocham identified pillars, the Budget seeks to convert India’s vast potential into measurable performance.
With this Budget, the Reform Express is firmly on track, carrying India from aspiration to achievement and from promise to performance.
(The writer is President, Assocham)
Published on February 2, 2026
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