Budget 2026 expectations: CII urges revenue boost, privatisation pipeline, debt glide
As the new year approaches, leading chamber of commerce, CII, has come out with its prescriptions for raising the growth push by suggesting a plugging of revenue leakage to improve tax GDP ratio, adopt a privatisation pipeline and rigorous management of fiscal health.
Kolkata: If 2025 was a year for the policymakers to stimulate demand and push growth, 2026 is going to be a time to maintain the pace of growth and increase it if possible and to achieve that end, Budget 2026 could be most powerful lever. Confederation of Indian Industry (CII) has urged the government to focus on institutional reforms and fiscal consolidation in the Union budget 2026 to maintain India's growth momentum.
"India has achieved a rare convergence of high growth, low inflation, and improving fiscal indicators. The next Union Budget must continue this momentum through disciplined fiscal management and deeper institutional reforms," Chandrajit Banerjee, director general, CII told the media.
Focus on revenue mobilisation, link tax with high value transactions
The elements in the strategy that CII urged the government to take consists of bolstering India's macroeconomic stability, debt sustainability, fiscal transparency, revenue mobilisation and expenditure efficiency. All will directly and indirectly promote the cause of higher growth.
After providing significant income tax relief in Budget for FY26, it is the time for revenue mobilisation. The CII urged the government to deploy advanced analytics tools to detect tax evasion. One of the ways could be linking tax returns with high-value transactions. The chamber underlined the need to improve tax GDP ratio from the current level of 17.5% (Centre and states combined). The Tax GDP ratio in the US is above 25% and so is the figure for the OECD countries.
"To finance the developmental needs of the country, India needs to increase its tax-GDP ratio. Leveraging the data from India's world-class digital infrastructure could help detect tax evasion and expand the tax base," the CII director general remarked.
Achieving a sustainable debt level
Debt sustainability is one of the crucial indicators that any administration has to strive for and CII's suggestion on this count is that adherence to the government's debt glide path targeting 50 ±1 per cent of GDP by FY31. Significantly, debt glide path is a financial strategy that envisages a calibrated reduction of debt over time and often involves a shift from riskier, growth-focused borrowing towards more conservative financial approach with an eye to promoting fiscal health.
Need for a Fiscal Performance Index
CII also urged the government to come up with a Fiscal Performance Index. Its purpose should be assessing the quality of public finances across the Centre and states. CII also suggested that performance on this count should be to linked to fiscal transfers to the states to nudge the states towards reforms. CII also thinks it will be prudent to revive the Medium-Term Fiscal Framework with a rolling 3 to 5-year roadmap for revenue, expenditure and debt.
Three-year privatisation pipeline
The chamber of commerce is also for a three-year privatisation pipeline of public sector enterprises in the non-strategic sectors which was announced in the 'Strategic Disinvestment Policy'. The stake of the government in PSUs should be brought down to 51% as a policy and then it should be diluted to 26-33% over time. This should continue side by side with attempts at full privatization.
CII also suggested reforms of the PDS, which now covers 81.3 crore people since it suffers from outdated data. The body also called for prioritising areas such as education, health, skilling and climate resilience, while leveraging digital tools for monitoring.