The Confederation of Indian Industry (CII) has urged the Indian government to implement a wide-ranging set of reforms in the forthcoming Union Budget for 2026-27. The goal is to strengthen India’s investment-led growth and solidify its position as one of the fastest-growing major economies worldwide. Key recommendations include increasing capital expenditure and launching a new National Infrastructure Pipeline, in addition to measures to boost investor confidence and streamline investment processes.
Proposed Increases in Capital Expenditure
CII has proposed a 12% increase in central capital expenditure for the fiscal year 2027, along with a 10% rise in capital expenditure support for states. This enhancement is viewed as essential for sustaining economic growth and attracting private investments. The industry body also suggests launching a Rs 150 lakh crore National Infrastructure Pipeline (NIP) 2.0, which would run from 2026 to 2032. This ambitious initiative aims to bolster infrastructure development across the nation. Furthermore, CII has recommended introducing incremental tax credits or compliance relaxations for companies achieving significant investment, output, or tax milestones, thus incentivizing growth across various sectors.
Strengthening Investment Frameworks
To further encourage investment, CII has called for the creation of a Non-Resident Indian (NRI) Investment Promotion Fund. This fund would focus on attracting foreign capital into critical sectors like infrastructure and manufacturing. The organization also advocates for restoring accelerated depreciation benefits to stimulate fresh capital expenditure, especially for micro, small, and medium enterprises (MSMEs). CII believes that these initiatives will not only augment investment but also help avoid triggering Minimum Alternate Tax (MAT) liabilities, thus fostering a more conducive environment for businesses.
Enhancing Public and Private Investment
CII underscores the significance of public capital expenditure as a foundation for India’s post-pandemic recovery, which has effectively attracted private investments. To enhance project execution, the organization has proposed establishing a Capital Expenditure Efficiency Framework (CEEF). This framework would focus on selecting high-impact projects and monitoring their outcomes based on productivity and regional growth benefits. CII also suggests tax incentives linked to new investments and production milestones in high-growth sectors, including clean energy, electronics, and logistics, to further propel expansion.
Facilitating Foreign Investment and Engagement
To boost foreign investment, CII has recommended easing external commercial borrowing norms, allowing for higher limits and longer tenures, along with partial risk coverage for infrastructure and manufacturing projects. A single-window clearance system with deemed approval within 60 to 90 days for large foreign direct investment (FDI) proposals is also suggested to expedite considerable investment decisions. In addition, CII envisions the creation of an India Global Economic Forum, a government-led platform aimed at fostering dialogue between global investors and policymakers. This initiative seeks to deepen engagement with sovereign wealth funds, pension funds, and multinational corporations, ultimately paving the way for a robust investment-driven growth strategy in India.
Digihunt is not a financial advisor, and this is not investment advice.