CII lays out investment roadmap for Budget 2026-27

The Confederation of Indian Industry's (CII) investment roadmap for the Union Budget 2026-27 underscores a critical aspect of India's economic ambition: sustained and robust investment. This proposal is not merely a set of recommendations but a strategic blueprint reflecting the private sector's perspective on securing India's future economic growth, particularly as the nation aims for developed status by 2047.

**Background Context:** India's economic journey since the liberalisation reforms of 1991 has been marked by a significant shift towards market-driven growth. Investment, both domestic and foreign, has been a cornerstone of this progress. However, to maintain a high growth trajectory, especially in a volatile global economic landscape, continuous efforts are needed to attract capital and stimulate economic activity. The Union Budget, typically presented in February for the upcoming financial year (e.g., Budget 2024-25 was for FY25), is the government's primary tool for fiscal policy, outlining revenue and expenditure plans. Industry bodies like CII proactively engage in pre-budget consultations to influence policy in favour of business growth and economic expansion. CII's early proposal for Budget 2026-27 highlights the long-term planning required for significant policy shifts and investment cycles, moving beyond immediate annual concerns.

**What Happened:** CII's core message is clear: India's economic future hinges on strong investment, necessitating a dual approach of boosting both public spending and private sector investment. To achieve this, they have put forth several key recommendations. Firstly, they advocate for **tax credits** for businesses, which would effectively reduce their tax liability and free up capital for reinvestment or expansion. Alongside this, they suggest **easier compliance** rules, aiming to reduce the administrative burden and costs associated with navigating complex regulatory frameworks. This aligns with the government's broader 'Ease of Doing Business' agenda. Secondly, to tap into foreign capital, CII proposes the establishment of an **NRI Investment Promotion Fund**. This dedicated fund would specifically target the vast wealth and potential investment from Non-Resident Indians, who often have a strong connection to India and a desire to contribute to its growth. Complementing this, they recommend **simpler borrowing rules** and a **single-window system for foreign investments**. Simpler rules would streamline the process for foreign entities to access capital or lend within India, while a single-window system would act as a one-stop clearance mechanism, drastically cutting down bureaucratic delays and making India a more attractive investment destination.

**Key Stakeholders Involved:** The primary stakeholders in this scenario are the **Confederation of Indian Industry (CII)** itself, representing a broad spectrum of Indian businesses, from large corporations to SMEs. CII acts as a powerful lobby group, articulating the collective voice of industry and influencing government policy. The **Government of India**, specifically the **Ministry of Finance**, is the key recipient of these recommendations, tasked with formulating and implementing the Union Budget. Their decisions will determine which of these proposals, if any, are adopted. The **private sector businesses** are direct beneficiaries and crucial actors, as their investment decisions are what CII aims to stimulate. **Non-Resident Indians (NRIs)** and other **foreign investors** are also significant stakeholders, as their capital is sought to fuel India's growth ambitions.

**Why This Matters for India:** These recommendations carry immense significance for India's economic trajectory. Increased public spending, particularly on infrastructure and social sectors, can create demand, generate employment, and improve productivity. Boosting private sector investment is vital for job creation, technological advancement, and enhancing India's manufacturing capabilities, aligning with initiatives like 'Make in India' and 'Atmanirbhar Bharat'. Attracting foreign capital, especially through an NRI Investment Promotion Fund, can provide much-needed foreign exchange, reduce reliance on external debt, and bring in new technologies and management practices. Simplified regulations and a single-window system are crucial for improving India's global 'Ease of Doing Business' ranking, making it a more competitive destination for global capital. Ultimately, a robust investment climate is essential for achieving higher GDP growth rates, alleviating poverty, and improving living standards for its vast population.

**Historical Context:** India's journey with investment has seen various phases. Post-independence, the emphasis was on public sector-led growth. The 1991 reforms ushered in an era of liberalisation, opening up the economy to private and foreign investment. Since then, successive governments have worked to attract FDI and FPI through policy changes, tax reforms, and infrastructure development. The 'Look East' policy, later 'Act East', and various bilateral investment treaties have also aimed to integrate India more deeply into the global economy. Industry associations have consistently played a role in advocating for policy changes to facilitate this growth, making pre-budget recommendations a long-standing tradition.

**Future Implications:** If adopted, CII's proposals could significantly shape India's economic landscape leading up to 2026-27 and beyond. The implementation of tax credits and easier compliance could provide a fillip to domestic manufacturing and services, potentially leading to increased employment and higher GDP growth. The NRI Investment Promotion Fund, if successfully implemented, could unlock a substantial new source of foreign capital, diversifying India's investment portfolio. However, challenges remain, including fiscal constraints on the government, the need for robust institutional frameworks, and ensuring that bureaucratic hurdles are genuinely removed. The success of these measures will determine India's pace in achieving its ambitious economic goals, reinforcing its position as a global economic power. These recommendations also highlight the ongoing dialogue between the government and industry, which is crucial for responsive and effective policymaking.

**Related Constitutional Articles, Acts, or Policies:** The Union Budget process is governed by **Article 112** of the Indian Constitution, which mandates the presentation of the Annual Financial Statement (Budget) to Parliament. The broader fiscal policy framework, including taxation and public expenditure, is intrinsically linked to constitutional provisions that define the powers of the Union and States. Foreign investments and capital flows are primarily regulated by the **Foreign Exchange Management Act (FEMA), 1999**, and related rules and regulations issued by the Reserve Bank of India. Corporate compliance is governed by the **Companies Act, 2013**. Government initiatives like **Make in India**, the **Production Linked Incentive (PLI) Schemes**, and the continuous efforts to improve **Ease of Doing Business** are policy frameworks that align with and would benefit from CII's proposals. The recommendations also touch upon the principles of fiscal federalism and the role of the state in economic development, as envisioned in the Directive Principles of State Policy (Part IV of the Constitution), which guide the state in making policies for public welfare and economic justice.