India’s next phase of economic growth will hinge on strong and steady investments across public, private, and foreign sectors, according to the Confederation of Indian Industry (CII). In a detailed policy release ahead of the Union Budget 2026-27, the industry body emphasized that the Budget should act as both a stabiliser and a growth driver.
CII Director General Chandrajit Banerjee stressed that boosting investments is crucial to keeping India on track as one of the fastest-growing major economies. “Public spending has played a key role in the country’s post-pandemic recovery. Continued support in this area will ensure sustained growth momentum,” he said.
The industry body has recommended raising central capital expenditure by 12% and increasing support to states by 10% in FY27, focusing on high-impact sectors such as transport, energy, logistics, and the green transition. CII also proposed the creation of a Capital Expenditure Efficiency Framework to prioritise, track, and measure the outcomes of key projects. Additionally, it suggested launching a Rs 150 lakh crore National Infrastructure Pipeline for 2026-32 to provide long-term clarity to investors and states.
Highlighting the need for a more flexible fiscal approach, CII called for a shift from strict annual deficit rules to a debt framework that adjusts with economic cycles, allowing the government to respond more effectively to shocks while maintaining long-term stability.
On the private investment front, Banerjee said businesses must now play a central role in driving growth. “Government measures, including last year’s income tax relief and GST 2.0, provided a significant demand push. Private sector investment will be the next big driver for economic growth and must be prioritised in the next fiscal,” he noted.
To incentivise private investment, CII recommended tax credits or easier compliance for companies that expand investment or production, and suggested reintroducing accelerated depreciation to help firms, particularly MSMEs, modernise.
To attract long-term global capital, the body proposed creating an NRI Investment Promotion Fund with partial government holding, aimed at channeling NRI and foreign institutional funds into infrastructure and AI. Strengthening the National Investment and Infrastructure Fund through a new Sovereign Investment Strategy Council was also suggested.
CII further called for simplified external borrowing rules and a single-window system for large foreign investment proposals, alongside the establishment of an India Global Economic Forum for structured dialogue between investors and government leaders.
Banerjee concluded, “An investment-driven growth strategy, anchored in fiscal credibility and institutional reforms, will define India’s next development phase.”
