Union Budget 2026: A Strategic Blueprint to Strengthen Manufacturing, MSMEs, Agriculture and Skills — Enabling Productivity Growth and Export Competitiveness, with Opportunities for South India

Mr Thomas John Muthoot, Chairman, CII Southern Region and Chairman and Managing Director, Muthoot FinCorp Ltd, welcomed the Union Budget 2026, describing it as a balanced and forward-looking roadmap for India’s long term economic growth. Commenting on the Budget, Mr Muthoot said, “The Union Budget 2026 reflects a balanced and forward-looking approach to India’s macroeconomic growth.

By reinforcing key sectors such as manufacturing, MSMEs, agriculture, and education, the Budget not only strengthens the nation’s economic foundations but also charts a clear path towards a Viksit Bharat. Its emphasis on productivity, infrastructure, and export competitiveness will support sustained growth, generate employment, and enhance India’s global economic standing, while significantly benefiting Southern India.”

He further highlighted the positive implications for the financial sector, particularly NBFCs. “The government’s continued focus on financial inclusion, enhanced access to credit, and technology driven reforms will enable NBFCs to reach deeper into the bottom of the pyramid.

The clear commitment to strengthening the financial ecosystem will support entrepreneurship and consumption while deepening trust in formal credit channels. These measures will create meaningful opportunities for sustainable growth across sectors in the region.” Mr Muthoot noted that the Budget’s emphasis on reforms, infrastructure led growth, and inclusive finance aligns well with the aspirations of Southern India and will play a critical role in supporting enterprises, job creation, and long-term economic resilience.

Mr P Ravichandran, Deputy Chairman, CII Southern Region and President-Danfoss India, Danfoss Industries Pvt Ltd, stated, “The Union Budget 2026 strikes a careful balance between fiscal prudence and ambitious growth, fostering inclusive development across sectors. We particularly welcome the focus on bio-pharma, semiconductors and electronics, rare earths, and container manufacturing, which will significantly strengthen India’s industrial capabilities and export competitiveness.”

One of the key highlights of the Union Budget 2026, he emphasized, “is its strong support for MSMEs, which are the backbone of India’s economy. By enabling easier access to credit, technology adoption, and skill development, the budget empowers small and medium enterprises to scale, innovate, and contribute meaningfully to employment generation and regional economic growth.

The proposed outlay of Rs 20,000 crore over the next 5 years in Carbon Capture Utilisation and Storage Technologies may scale adoption of sustainable technologies across the key industrial sectors, thus reaffirming country’s commitment to Net Zero goals.”

Mr. R Sivaprasad Reddy, Chairman, CII Telangana and MD, Rachamallu Forgings opined that said that Union Budget 2026 is a Futuristic budget & expected to boost the economy in the long run. MSMEs have received particular attention as the measures mentioned are both timely and practical. We strongly welcome the strong focus on MSMEs, which remain the backbone of India’s economy.

Initiatives such as the Rs 10,000 crore SME Growth Fund, enhanced credit support through TReDS, linking of GeM with TReDS, and simplified compliance mechanisms will improve access to finance, encourage formalisation and boost the competitiveness of smaller enterprises. These measures are critical for employment generation and inclusive growth.

Mr. M Goutham Reddy, Vice Chairman, CII Telangana & Vice Chairman, Resustainability in his address said that Infrastructure and capital expenditure stand out as one of the strongest pillars of the Budget. Industry voices point to the scale of public capex ₹12.2 lakh crore, with effective capital expenditure crossing ₹17 lakh crore as a major catalyst for private investment.

The focus on logistics, freight corridors, inland waterways and high-speed rail is expected to improve productivity and meaningfully lower the cost of doing business. As the Hon’ble finance minister briefly mentioned about three Kartavyas which focus on accelerate and sustain economic growth, fulfil the aspirations of the people and inclusive growth while integrating economic performance with equity and opportunity.

Mr. Anil Epur, Past Chairman, CII Southern Region appreciated promotion of high-value and export-oriented crops such as coconut, cocoa, cashew, sandalwood, nuts and agarwood. Dedicated schemes will help rejuvenate old orchards, improve productivity and add value in processing benefiting millions of farmers who depend on these crops. The budget announced ‘Bharat Vistar’, a multilingual AI-powered agriculture platform that integrates agricultural data, AgriStack resources, and best practices into an accessible tool for farmers. This will help with Crop planning and advisory, Weather and pest alerts and provides market information. Credit-linked subsidies and support for livestock entrepreneurs, Strengthening value chains in dairy, poultry and allied sectors and Development of 500 water reservoirs to boost fisheries and rural employment

will expand income opportunities beyond crop farming.

Mr. Y Harish Chandra Prasad, Past Chairman, CII AP (erstwhile) & Chairman, Malaxmi Group mentioned that the Union Budget allocates ₹20,000 crore over five years for Carbon Capture, Utilisation & Storage (CCUS) technologies to help reduce greenhouse gas emissions from heavy industries such as power, steel, cement, refineries and chemicals. This marks a significant fiscal push to scale decarbonisation solutions in sectors with high emission intensity. By supporting CCUS deployment at scale, the Government signals a stronger commitment to climate mitigation while integrating industrial growth with environmental responsibility.

Mr. C Shekar Reddy, Immediate Past Chairman, CII Telangana in his address said that a new Dedicated Freight Corridor connecting Dankuni (East) to Surat (West) will strengthen cargo and industrial linkages. Seven High-Speed Rail corridors to enhance inter-city connectivity and reduce travel times. Operationalisation of 20 new National Waterways and coastal cargo schemes to expand environmentally efficient freight movement via waterways. These initiatives support economic corridors and logistics efficiency, boosting trade and benefitting regions beyond major metros. However there is no mention of support for affordable housing which is much required.

Mr. M V Narasimham, Convenor, Ease of Doing Business Panel, CII Telangana & CFO, Dr Reddy's Laboratories Ltd mentioned that BioPharma SHAKTI, a new flagship programme where in ₹10,000 crore outlay over 5 years specifically for biologics & biosimilars production, Developing an end-to-end ecosystem from R&D to manufacturing and clinical trials, Creation of a biopharma research & talent network with establishment of 3 new NIPERs (National Institutes of Pharmaceutical Education & Research), Upgradation of 7 existing NIPERs for advanced research and industry collaboration and Building a network of 1,000+ accredited clinical trial sites, accelerating drug development and regulatory quality. Biologics and biosimilars are high-growth, high-value segments crucial for treating cancer, autoimmune and rare diseases typically reliant on imports. Strengthening domestic capability will lower costs and improve access.

Mr. AVPS Chakravathy, Convenor, Life Sciences Panel, CII Telangana & CEO, Eco Bliss Pvt. Ltd. in his address said that strengthening Central Drugs Standard Control Organisation (CDSCO) to meet global standards will lead to better clinical research and foreign collaborations. As the budget waived customs duties on several drugs used by the cancer patients will make them more affordable and accessible.

Ms. Hema Srinivas, Chairwoman, IWN Telangana in her address said that setting up of SHE-Marts community-owned retail outlets run by women entrepreneurs is expected to help women move beyond credit-linked livelihoods to owning and managing enterprises, strengthen grassroots self-help groups, improve market access. Establishing

Girls’ Hostels Across Every District will improve girls’ education and workforce participation. The Budget emphasised support for women in STEM (Science, Technology, Engineering & Mathematics) and emerging technological fields. Policies linked to the AI Mission, National Quantum Mission and research funds include provisions that bolster opportunities for women in high-growth sectors and skill development.

The Budget also places strong emphasis on employment generation and human capital development. Initiatives covering education, skilling, healthcare, tourism, creative industries and services will help create quality jobs across the economy. The focus on university townships, skill-linked education, healthcare infrastructure, and emerging sectors such as AVGC and medical tourism reflects a long-term vision for building a future-ready workforce.

Equally significant is the strong commitment to sustainability. The allocation for carbon capture, green freight corridors, clean energy and environmentally sustainable infrastructure demonstrates India’s resolve to pursue growth that is both resilient and responsible.

Overall, the Union Budget 2026–27 strikes a fine balance between fiscal discipline, growth-oriented public investment, structural reforms and employment generation. It reinforces India’s position as one of the world’s most attractive investment destinations and provides a strong platform for industry to partner with Government in advancing the vision of a Viksit Bharat. CII looks forward to working closely with all stakeholders to support effective implementation and accelerate India’s growth momentum