New Delhi, Feb 1 The sharp increase in capital expenditure to Rs 12.2 lakh crore, along with new freight corridors, national waterways and city economic region development, directly addresses industry’s concerns around infrastructure gaps and logistics costs, leading industry chamber Assocham said on Sunday.
Calling the Union Budget 2026–27 as a forward-looking and reform-driven one that strengthens the foundations of India’s medium- to long-term economic growth, the chamber said it reflects several key policy priorities consistently highlighted by industry, particularly the need for sustained public investment, manufacturing-led expansion, MSME scale-up and a simpler, more predictable regulatory framework.
The focus on developing city economic regions, especially in Tier II and Tier III cities, will help unlock agglomeration benefits, spur regional growth, and create new urban engines of economic activity. These measures will have a strong multiplier effect on growth and are expected to crowd in private investment and support long-term productivity growth, Assocham said in a statement.
"The Union Budget 2026–27 provides a clear and credible reform roadmap for sustaining India’s growth momentum. The strong push on infrastructure, manufacturing clusters and MSME support reflects industry’s core priorities," Assocham President N.K. Minda said.
The proposal to establish dedicated rare earth corridors in mineral-rich states such as Odisha, Kerala, Andhra Pradesh, and Tamil Nadu is particularly significant for strengthening strategic supply chains and reducing critical import vulnerabilities.
Notably, initiatives such as ISM 2.0 and Biopharma Shakti are expected to strengthen India’s position in strategic and future-ready sectors, while supporting technology development and skilled employment, the chamber noted.
From an industry perspective, the clear positioning of MSMEs as growth "champions" is another positive feature of the Budget.
Moreover, the Rs 10,000 crore SME Growth Fund, expansion of cash-flow-based lending and steps to strengthen NBFC-led credit delivery are expected to ease financing constraints and help MSMEs scale up, integrate with global value chains and contribute more effectively to exports and employment.
Assocham Secretary General Saurabh Sanyal said the Budget demonstrates strong alignment between industry feedback and policy action.
"Measures on MSME financing, tax simplification, capital market deepening and services-led employment will improve ease of doing business and investor confidence. The focus on scale, productivity and competitiveness positions the economy well to navigate global uncertainties while advancing India’s long-term development objectives," he said.
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