Budget 2026: Cautious & prudent, yet focusing on the long-term journey

Economic Survey and Budget 2026 chart a fiscally prudent, future-ready roadmap, betting on infrastructure, manufacturing and resilience amid global uncertainty

This year’s Economic Survey and the Union Budget were more closely followed for more reasons than one. First, in the context of current global political uncertainties and economic headwinds, it was important to watch the government’s own strategy and direction to tackle the emerging global order. Second, the current situation also provides opportunities for India and this year’s Budget announcement was a platform to plan for the future more structurally. 

In tandem with the Union Budget, the Economic Survey also provides an authoritative diagnosis of the Indian economy’s health that provides strategic insight into the government’s thinking on the challenges it is grappling with and the issues of national importance. This year’s Survey highlights the resilience in the face of global disruptions—such as ongoing geopolitical tensions and supply chain challenges. India’s GDP growth is projected at 6.5–7 per cent for the year ahead, underpinned by a rebound in private consumption, strong capital formation, and a stable financial sector with moderate inflation. The Survey emphasises the need for continued investment in physical and digital infrastructure, deepening manufacturing capabilities, and strengthening human capital and citizen health to accelerate the growth momentum in the future. 

The global environment remains fraught with uncertainty and armed conflict in multiple geographies creates significant supply chain risks to our manufacturing, trading value chains and the financing systems and costs. The Budget has balanced the risks and opportunities carefully, focusing on the fiscal prudence journey, identifying and allocating capital on the future focus sectors like data centres, semiconductors, electronics and bio-pharma and rare earth value chain. These sectors and the proposed spend would help India to be future ready and absorb future external and strategic shocks. 

As expected the spend on public infrastructure has been double downed with a record allocation and it continues to be one of the recurring pillars of national development. It will be important to spend the money with speed and efficiency including development of the city economic zones with the state governments. This will enhance productivity, increase employment and help reduce migration to the metros. 

The other important area of capital allocation has been on the freight corridor investment proposals and the focus on the inland waterways as these will significantly help in improving the logistics efficiency and costs. By addressing supply chain bottlenecks and reducing logistical costs through integrated infrastructure, the government’s intention to drive a manufacturing-led growth is clear. 

Continuing on the policy reforms on making the medium and small enterprises more resilient, investable and sustainable deserves appreciation and will be very crucial for future sustainable growth. In a challenging global environment, the Union Budget delivers a fiscally prudent and forward-looking roadmap. This should be looked at as putting the policy bets and capital on the future growth and development of India across the hue of urban, rural and industrial India. Effective execution and adaptive policymaking with continued reform and system efficiency will be key to realising the ambitions.

The writer is ED & CFO, Tata Steel