Mumbai, India — As India approaches its 2026 budget announcement, corporate leaders are calling for a budget that prioritizes stability and predictability over extravagant spending. With the country maintaining a growth rate above 7%, the business community, represented by figures such as Habil Khorakiwala of Wockhardt Group and Anish Shah of Mahindra Group, emphasizes the need for long-term reforms that will bolster competitiveness in an uncertain global environment.

During a recent pre-budget roundtable hosted by ET-PwC, industry leaders expressed their views on the upcoming budget, which is set to be unveiled on February 1. They argue that the current climate, marked by global risks such as trade tensions and tighter liquidity, necessitates a focus on simplification and structural reforms rather than headline-grabbing initiatives. The overarching sentiment is clear: corporate India is looking for a “boring and predictable” budget that supports sustained growth.

Experts like Neelkanth Mishra, chief economist at Axis Bank, highlight the importance of maintaining fiscal discipline. He notes that the government’s commitment to fiscal consolidation is crucial for enhancing predictability and reducing the cost of capital. With looming liabilities such as the next pay commission, Mishra believes this budget presents an opportunity to solidify the government’s credibility and outline a clear path toward achieving a debt-to-GDP ratio of 50% by FY31.

The Demand for Structural Reforms

India Inc’s call for stability is not merely about avoiding flashy spending; it is rooted in the belief that structural reforms are essential for long-term growth. Anubhuti Sahay, head of India economics research at Standard Chartered Bank, emphasizes that the current macroeconomic conditions are stronger than during previous global downturns. However, she cautions that the government must focus on foundational reforms, particularly in research and innovation, to enhance India’s competitiveness on the global stage.

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The Demand for Structural Reforms India Inc’s call for stability is not merely about avoiding flashy spending; it is rooted in the belief that structural reforms are essential for long-term growth.

Habil Khorakiwala echoes this sentiment, suggesting that India must leverage its domestic demand to gain global recognition. He argues that the government should direct funding toward innovation and R&D in a way that transforms India into a more research-oriented economy. This approach aligns with the broader goal of enhancing the country’s global leverage, similar to the positions held by the US and China.

Moreover, industry leaders are advocating for a rethinking of governance structures to reduce operational costs and improve efficiency. The integration of technologies such as artificial intelligence could play a significant role in achieving these objectives. As the business landscape evolves, companies are increasingly looking for ways to streamline operations and enhance productivity.

Implications for Businesses and Employment

The emphasis on stability and predictability in the upcoming budget has significant implications for businesses across various sectors. Sudhanshu Vats, managing director of Pidilite Industries, points out that recent reforms have already begun to stimulate demand recovery, particularly in consumer-facing industries. However, he warns that demand cannot solely rely on tax adjustments; non-tariff barriers and state-level ease of doing business are equally crucial.

Vats advocates for targeted interventions rather than broad stimulus measures, particularly in sectors with high multiplier effects. He emphasizes the importance of maintaining a stable indirect tax environment, noting that the current 5% GST rate for household staples is beneficial for consumers.

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As companies prepare for the budget, many are adopting a cautious approach to hiring. Reports indicate that pre-budget hiring is on pause as firms await clarity on fiscal policies. This trend reflects a broader uncertainty in the job market, where businesses are hesitant to commit to new hires without a clear understanding of the economic landscape post-budget.

Steps for Navigating the Budget Landscape

• Stay Informed: Keep abreast of the latest budget discussions and announcements to understand potential impacts on your industry.
• Adapt Business Strategies: Consider how fiscal policies may affect your business model and adjust strategies accordingly.
• Engage with Policymakers: Actively participate in discussions with industry associations to voice concerns and advocate for favorable policies.
• Focus on Innovation: Invest in R&D and innovation to stay competitive in a changing economic environment.

However, experts warn that while stability is crucial, it should not come at the cost of necessary investments in growth. A recent analysis by PwC suggests that excessive caution could hinder economic dynamism, emphasizing the need for a balanced approach that fosters innovation while maintaining fiscal discipline.

However, experts warn that while stability is crucial, it should not come at the cost of necessary investments in growth.

Looking Ahead: The Future of India’s Economic Landscape

As the budget approaches, the future of India’s economy hangs in the balance. The call for a predictable budget reflects a broader desire for stability amid global uncertainties. However, the challenge will be to ensure that this stability does not stifle growth and innovation.

With infrastructure development and ease of doing business being key priorities, the government must strike a balance between fiscal prudence and the need for strategic investments. As companies navigate this landscape, the focus will likely shift toward enhancing operational efficiencies and leveraging domestic demand to drive growth.

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Will the upcoming budget provide the clarity and direction that businesses need to thrive in a complex global environment? The answer may shape India’s economic trajectory for years to come.