Budget 2026-27: A blueprint for institutional maturity in India's growth

Budget 2026-27 stands out less for headline stimulus and more for the structural levers it activates for the next investment cycle. By targeting a fiscal deficit of 4.3 per cent while scaling public investment to a record ₹12.2 trillion, the government has demonstrated rare discipline — balancing fiscal credibility with an aggressive infrastructure mandate. This equilibrium is vital; consistent public capex into roads, railways, and defense serves to attract private capital, delivering a more potent productivity multiplier than traditional consumption-led spending. 

For the private sector, the real story lies in the de-risking of the Indian investment landscape. The introduction of the Infrastructure Risk Guarantee Fund and CPSE-linked REITs are sophisticated shifts that improve the risk-reward profile for institutional capital. Combined with doubling the PROI investment limit to 10 per cent, these measures signal a clear intent to deepen our capital markets and invite long-duration global and diaspora pools into productive assets. 

Equally significant is the focus on City Economic Regions under the Kartavya framework. By nurturing Tier II and III cities into integrated industrial hubs, the government is broadening India’s growth footprint. Furthermore, the 17.5 per cent surge in defense capex, paired with a 75 per cent domestic procurement mandate, creates a powerful, non-inflationary catalyst for the manufacturing ecosystem.  

Taken together, these shifts mark a transition toward a more durable, private-sector-led growth phase. It is a mature budget that prioritises disciplined capital allocation, creating a sophisticated and investible environment for the long-term investors.

 

The writer is group chief executive officer, Ambit Group