Budget 2026: A time for higher growth, quality jobs and global competitiveness
Building on the multiple reforms undertaken last year and against a backdrop of increased trade and investment opportunities, the Union Budget 2026 can be expected to deliver well-calibrated fiscal interventions for the Indian economy. Leveraging the country’s strong underlying growth potential, the Budget can be an opportunity to announce policy rationalization, attract investments, integrate more deeply with value chains and create quality employment for a more competitive India. Some of these opportunities are discussed in this article as mentioned below.
Rural transformation: There is huge potential in agriculture and higher investments can shift the focus towards exports and innovation in the rural ecosystem. Last year’s GST 2.0 reforms have positively changed the scenario for consumption and food processing investments. It is important to deepen reforms and encourage investments in the fields of agricultural technologies, warehouses, cold storage, testing and packaging.
By leveraging skills and technology at scale, India’s largely female rural workforce can become proactive participants in an agricultural marketing ecosystem for frozen food, ready-to-eat and packaged organic foods for export to affluent markets. Agricultural start-ups can be encouraged to harvest farm surpluses, connecting products to both local and international markets, even as logistics related to supply chains are prioritized. The higher incomes that farmers will earn will further accelerate domestic consumption levels and the economy.
A production center: It is imperative to attract more domestic and foreign investments under the Make in India initiative in manufacturing. Policies and allocations that unlock access to land, labor, logistics, reliable energy and other services, skilled labor, and streamlined customs procedures will accelerate investment in domestic manufacturing and exports. Backed by design, quality testing, branding and consistent marketing support, Indian products not only dominate global markets but can also successfully penetrate new markets.
Allocations that strengthen infrastructure and connectivity in industrial corridors by clarifying the establishment of large country-specific or product-specific industrial districts in terms of investments will go a long way in building an ecosystem around supply chains. The India-EU FTA could open up a world of possibilities in this regard for renewable energy, electric mobility, and other areas of high-tech innovation and manufacturing.
At the same time, making single window permits mandatory, time-bound and agreed approvals, longer validity period of licenses and automatic renewal process will greatly contribute to Ease of Doing Business. A new industrial policy that clearly defines the roles of the center and states will bring greater accountability and facilitate investments.Services that facilitate growth: Applications built on the foundation of Digital Public Infrastructure (DPI) such as UPI, Aadhar and Digilock have shown how growth-enabling this can be. Increased capital allocation and support to DPI and its integration with healthcare and education systems, formalization of MSME and logistics-related services will accelerate technical collaborations and economic growth.
Continued policy and financial support for digital services such as fintech, SAAS and AI will help drive innovation and value addition in a sector that already contributes significantly to India’s GDP and exports.
High technology skill: There are few options other than encouraging rapid skill development in artificial intelligence, machine learning, data engineering and other high-tech sectors. Expanding industry-related training programs, especially in services, technology and tourism, will rapidly create jobs by aligning the supply of skilled labor with the demand of growing sectors.
The availability of a strong pool of skilled manpower will enable greater integration of global supply chains, including the continued expansion of Global Talent Centers (GCCs), and contribute to the international mobility of skilled labour.
Infrastructure and logistics: Efficient logistics remains a critical area for creating global competitiveness for our products. Giving high priority to infrastructure and services related to transportation, urban life, agricultural needs, high-quality energy and fiber corridors will have a multiplier effect on growth, employment and consumption.
At the same time, financially empowering the newly established Gati Shakti Integrated Transport Planning and Research Organization (GTPRO) to ensure infrastructure connectivity of economic clusters to EXIM gateways, with the mandate to monitor the progress of Maritime Development Fund and National Infrastructure Pipeline investments, will ensure faster execution of the project.
Result-oriented approach: In the last one year, the Union Cabinet has approved major policy packages to support trade, industry, infrastructure connectivity and innovation ecosystems; This paved the way for the Union Budget to make multi-year allocations to translate these major initiatives into results.
Shifting to results-oriented budgeting for schemes such as Export Promotion Mission, Electronic Component Manufacturing Plan, major infrastructure projects for connectivity, Agricultural Infrastructure Fund, Research Development and Innovation (RDI) Programme, will accelerate output delivery.
Delivering Viksit Bharat: Equally important are allocations to implementing agencies like the National Shipbuilding Mission, SPVs of Industrial Corridors, various Councils and Missions aligned with national priorities such as skills, exports, health, education and social security to expedite deliveries for Viksit Bharat.
The contributor is the former Union Labor Secretary; opinions are personal.
