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Budget 2026: India Eyes 9% Growth, Boosts Capex
12 Jan
Summary
- Union Budget 2026 likely to target 8.5-9% growth.
- Capital expenditure to rise to Rs 12-12.2 lakh crores.
- MSMEs and export sectors to be prioritized amid global headwinds.
India's Union Budget 2026 is anticipated to set an ambitious growth target of 8.5-9% for the upcoming fiscal year. Economists project a significant increase in capital expenditure, aiming for Rs 12-12.2 lakh crores, signaling a strong focus on infrastructure development and economic expansion.
The budget is expected to prioritize support for MSMEs and export-oriented sectors, crucial for navigating intensifying global economic headwinds. While significant tax cuts are not foreseen, further rationalization of customs duties and potential interest subvention schemes for these key sectors are anticipated to boost competitiveness and resilience.
Furthermore, the Reserve Bank of India may consider a 25 basis points cut in its policy rate to stimulate growth. The government also plans to enhance its flagship Production Linked Incentive (PLI) scheme, potentially introducing new incentives for research and development and expanding coverage to emerging sectors like AI and robotics.
