Investment Strategy: CII Advocates for Reforms in Budget 2026-27
The Confederation of Indian Industry (CII) has called on the Indian government to implement a comprehensive set of reforms in the upcoming Union Budget for 2026-27. This initiative aims to bolster India’s investment-led growth and maintain its status as one of the fastest-growing major economies globally. Key recommendations include increasing capital expenditure and launching a new National Infrastructure Pipeline, alongside measures to enhance investor confidence and streamline investment processes.
Proposed Increases in Capital Expenditure
CII has proposed a 12% increase in central capital expenditure for the fiscal year 2027, along with a 10% rise in capital expenditure support for states. This increase is seen as vital for sustaining economic growth and attracting private investments. The industry body has also suggested the launch of a Rs 150 lakh crore National Infrastructure Pipeline (NIP) 2.0, which would span from 2026 to 2032. This ambitious plan aims to enhance infrastructure development across the country. Additionally, CII has recommended introducing incremental tax credits or compliance relaxations for companies that achieve significant milestones in investment, output, or tax contributions, thereby incentivizing growth in various sectors.
Strengthening Investment Frameworks
To further stimulate investment, CII has called for the establishment of a Non-Resident Indian (NRI) Investment Promotion Fund. This fund would aim to attract overseas capital into critical sectors such as infrastructure and manufacturing. The organization also advocates for the reinstatement of accelerated depreciation benefits to encourage fresh capital expenditure, particularly for micro, small, and medium enterprises (MSMEs). CII believes that these measures will not only enhance investment but also help in avoiding the triggering of Minimum Alternate Tax (MAT) liabilities, thus providing a more favorable environment for businesses.
Enhancing Public and Private Investment
CII emphasizes the importance of public capital expenditure as a cornerstone of India’s post-pandemic recovery, which has successfully attracted private investments. To improve project execution, the organization has proposed the creation of a Capital Expenditure Efficiency Framework (CEEF). This framework would focus on selecting high-impact projects and monitoring their outcomes based on productivity and regional growth benefits. CII also suggests tax incentives tied to new investments and production milestones in high-growth sectors, including clean energy, electronics, and logistics, to further drive expansion.
Facilitating Foreign Investment and Engagement
To enhance foreign investment, CII has recommended easing external commercial borrowing norms, allowing for higher limits and longer tenures, along with partial risk coverage for infrastructure and manufacturing projects. A single-window clearance system with deemed approval within 60 to 90 days for large foreign direct investment (FDI) proposals is also proposed to expedite significant investment decisions. Furthermore, CII envisions the establishment of an India Global Economic Forum, a government-led platform designed to foster dialogue between global investors and policymakers. This initiative aims to deepen engagement with sovereign wealth funds, pension funds, and multinational corporations, ultimately paving the way for a robust investment-driven growth strategy in India.
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