Budget ensures policy continuity while boosting manufacturing, say experts

Finance Minister Nirmala Sitharaman announced a slew of measures to boost manufacturing, a tax holiday for global data centres, and incentives for the agriculture and tourism sectors as she unveiled a Rs 53.5-lakh crore Budget seen as a long-term blueprint for sustaining growth amid rising global risks.

The Union Budget 2026–27 ensures policy continuity while boosting manufacturing, sunrise sectors and MSMEs to support growth and employment, opined experts on Sunday. Finance Minister Nirmala Sitharaman announced a slew of measures to boost manufacturing, a tax holiday for global data centres, and incentives for the agriculture and tourism sectors as she unveiled a Rs 53.5-lakh crore Budget seen as a long-term blueprint for sustaining growth amid rising global risks. Sticking to fiscal discipline and shunning populist measures despite five key states, including West Bengal and Tamil Nadu, heading to polls soon, her Budget for the fiscal year beginning April, however, rattled stock markets, with a higher transaction tax on derivatives trading weighing on sentiment. ''The Union Budget 2026-27 maintains policy continuity, tax predictability, while attempting a fine balancing act between rural and urban, legacy and sunrise sectors. ''Structurally, the budget has continued its focus on emerging sectors with notable scaling up in manufacturing, coupled with focus on semiconductors, data centre, AI and infrastructure,'' said Challa Sreenivasulu Setty, Chairman, SBI, and Chairman, IBA. Sanjay Agarwal, Founder, MD & CEO, AU Small Finance Bank, said that the Budget sends a powerful signal of consistency and confidence. ''The proposed high-level banking committee is a strategic masterstroke, promising a roadmap that balances credit expansion with consumer protection and technological agility,'' Agarwal said. Madan Sabnavis, Chief Economist, Bank of Baroda, said the Budget has delivered good fiscal numbers while providing targeted incentives in critical areas. ''There has been steadfastness shown in terms of lowering the debt to GDP ratio, and the fiscal deficit ratio will be marginally lower than last year at 4.3 per cent. More importantly, the gross and net borrowing programmes have been maintained almost at last year's level, which should assuage bond markets as bond yields should remain stable,'' Sabnavis said. Manoj Kumar Dubey, CMD, Indian Railway Finance Corporation (IRFC), said the introduction of seven high-speed rail corridors - Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Hyderabad-Chennai, Chennai-Bengaluru, Delhi-Varanasi, and Varanasi-Siliguri - as vital growth connectors excites us; IRFC stands ready to fuel this transformation with efficient funding solutions. ''Several announcements resonate strongly with IRFC's mission. The record Rs 12.2 lakh crore capital expenditure allocation will surge infrastructure forward, particularly through new Dedicated Freight Corridors from Dankuni to Surat and 20 additional National Waterways, perfectly aligning with our expertise of financing the infra projects having railway linkages,'' Dubey said. Ritvik Dashora, CEO, Tradomate, a trade analysis platform, said the Budget's proposal to offer a tax holiday till 2047 for foreign cloud firms using India-based data centres signals a clear strategic push. The government is positioning India not just as a digital consumption market, but as a global backend for cloud and AI infrastructure. ''Data centres are capital-intensive and take years to break even, so policy certainty over two decades materially improves project returns,'' Dashora said. Subrata Mondal, Managing Director & CEO, IFFCO-TOKIO General Insurance Company, said the Budget is balanced and growth-oriented that addresses key structural and sectoral priorities. ''The exemption of MACT interest from income tax and removal of TDS will significantly ease motor claim settlements and improve claimant experience. The proposed review of FEMA NDI Rules is a positive step towards creating a more investor-friendly environment, supporting capital flexibility and global participation in the insurance sector,'' Mondal said. Shikhar Aggarwal, Chairman, BLS E-Services, opined that the Budget 2026 makes a decisive statement for India's banking and financial ecosystem by moving from balance sheet repair to long-term resilience and credit expansion. ''The proposed High-Level Committee on Banking for 'Viksit Bharat' reflects a forward-looking reform agenda that will deepen governance, strengthen risk management and align banks and NBFCs with the needs of a growing, tech-enabled economy,'' Aggarwal added. Ankit Kumar, CEO & Founder, Skye Air Mobility, said that enhanced support for MSMEs and SMEs through the Rs 10,000-crore SME Growth Fund, Self-Reliant India Fund, and GeM–TReDS integration improves liquidity and shortens payment cycles, accelerating the adoption of drone logistics. Strategic investments in bio-pharma and semiconductors, alongside incentives for data centres, IT services, and skilling, strengthen the technology, Kumar added. ''The proposed Rs 10,000 crore SME Growth Fund is a timely intervention to incentivise high-potential MSMEs and strengthen access to growth capital. In addition to this, the 'corporate mitras' initiative creates a dual opportunity: MSMEs gain professional support to navigate compliance and scale, while Tier II and III cities gain formal employment pathways in skilled para-professional roles,'' Wadhwani Foundation CEO Ajay Kela said. Pavan Choudary, Chairman, Medical Technology Association of India (MTaI), said the Union Budget 2026 reflects a shift from episodic healthcare spending to long-term capacity building. The thrust on health advancement through knowledge, technology and innovation under the BioPharma SHAKTI initiative, along with the strengthening of CDSCO's regulatory and execution capabilities, expansion of NIPERs, and large-scale skilling of allied healthcare professionals, signals a systemic deepening of India's health infrastructure, regulatory credibility, and human capital, Choudary added. Vikas Garg, Chairman, Ebix Group, said that measures such as the reduction in TCS on overseas tour packages also signal a shift towards simpler, consumption-friendly tax compliance for individuals. Taken together with steps to deepen capital markets, improve credit flow, and enhance ease of doing business, the Budget strikes a disciplined balance between ambition and prudence, positioning India as a stable, investable, and globally competitive economy, Garg said. Suhail Nathani, Managing Partner, Economic Laws Practice, said the Budget has some very focused agenda items such as pushing India's share of global services to 10 per cent, policies for strategic industries such as rare earths and electronics, and huge tax incentives for data centres.

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