CII seeks more reforms for sustained investment inflows
Budget 2026-27 has to serve the dual role of stabiliser and growth enabler, it says
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New Delhi: Industry lobby CII has proposed a comprehensive set of reforms for the forthcoming Union Budget 2026-27 to drive sustained investment growth spanning public, private, and foreign investments and maintain India’s momentum as one of the world’s fastest-growing major economies.
The Confederation of Indian Industry (CII) suggested increasing central capital expenditure by 12 per cent and capex support to states by 10 per cent in FY27; launching a Rs 150 lakh crore National Infrastructure Pipeline (NIP) 2.0 for 2026-32; offering incremental tax credits or compliance relaxations for firms achieving significant new investment, production, or tax contribution milestones; and establishing an NRI Investment Promotion Fund.
It also called for reinstating accelerated depreciation benefits to further incentivise fresh capital expenditure and technology upgrades, particularly for MSMEs and manufacturing industries, provided the measure is structured to stimulate modernisation without triggering Minimum Alternate Tax (MAT) obligations.
Besides, CII urged for strengthening the National Investment and Infrastructure Fund (NIIF) by forming a Sovereign Investment Strategy Council (SIFC) to align investments with national priorities.
The Union Budget for the 2026-27 fiscal year is expected to be presented on February 1.
According to CII, reinforcing fiscal stability through an economic-cycle-based public debt framework, in place of inflexible annual deficit rules, would also enhance resilience by allowing counter-cyclical flexibility during global shocks and avoiding repeated breaches of yearly targets.
Such a framework would strengthen credibility by aligning fiscal policy with medium-term debt sustainability, it said. “The forthcoming Union Budget 2026-27 has to serve the dual role of stabiliser and growth enabler, and promoting investments will be one of the most critical components in this regard,” CII Director General Chandrajit Banerjee said.
Towards this objective, CII has proposed a comprehensive investment strategy anchored in fiscal prudence, capital efficiency, and investor confidence.
The recommendations emphasise strengthening public capital expenditure as the backbone of infrastructure-led growth, while simultaneously unlocking private and foreign investment through targeted incentives, institutional reforms, and enhanced global engagement.
Bolstering public investment remains essential, CII said, observing that public capital expenditure has been the key driver of India’s post-pandemic recovery, catalysing infrastructure expansion and crowding in private capital.
To strengthen project selection and execution, CII has proposed institutionalising a Capital Expenditure Efficiency Framework (CEEF) to prioritise high-impact projects, track physical and financial progress, and evaluate outcomes based on productivity and regional spillovers.
