Union Budget 2026: Make in India tops industry wish list amid execution worries

Indian companies are looking to the Union Budget 2026 for answers on growth, with the Budget, to be presented by Finance Minister Nirmala Sitharaman on February 1, expected to set the direction for manufacturing, investment and jobs. A majority of industry stakeholders want the Union Budget 2026-27 to put domestic manufacturing and the Make in India programme at the centre of policy, pointing to high compliance burden, logistics and energy costs, and weak access to long-term capital as major barriers to scaling up production, according to a pre-Budget survey by the Associated Chambers of Commerce & Industry of India.

The ASSOCHAM survey covered professionals from manufacturing, services, infrastructure, IT and ITeS, start-ups and allied sectors. It found that 55 per cent of respondents remain optimistic about the business outlook for the next 12 months. Another 32 per cent described their outlook as neutral, while 13 per cent reported a pessimistic view, reflecting mixed expectations ahead of the Union Budget 2026-27.

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Budget 2026 priorities for growth

Boosting domestic manufacturing emerged as the single most important Budget priority to move towards the goal of an Aatmanirbhar and Viksit Bharat. This was followed by support for micro, small and medium enterprises and simpler tax and compliance systems. Respondents also placed importance on infrastructure and logistics development, skills and job creation, and faster digital and artificial intelligence-led growth as key areas where the Budget could make a difference.

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Union Budget impact of existing schemes

Government steps such as higher infrastructure capital expenditure, GST 2.0 reforms and Production Linked Incentive schemes were seen as moving in the right direction, but industry said the results on the ground remain limited.

About 35% of respondents said these initiatives have delivered only limited benefits so far, while 39 per cent felt the impact has been moderate. This pointed to gaps in design, access and last-mile delivery that the Union Budget needs to address.

Budget 2026 reforms industry is seeking

On manufacturing expansion, compliance and regulatory load was identified as the biggest hurdle. Other constraints included global demand and market access, shortage of skilled workers, high logistics and energy costs, and gaps in technology and automation.

Issues linked to quality standards and certification requirements were also mentioned. To speed up manufacturing growth, respondents said the Budget should provide cheaper long-term capital, improve credit flow and offer focused tax incentives for technology upgrades, automation and artificial intelligence. They also called for wider PLI coverage, tax benefits tied to Industry 4.0, rational customs duties on key raw materials and quicker approvals in industrial parks, special economic zones and clusters.

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The ASSOCHAM Budget survey highlighted the strong link between manufacturing and MSME health, with 55 per cent of respondents being MSMEs. Delayed payments and working capital shortages were the biggest concerns, leading to calls for cash-flow-based lending, faster credit using GST and e-invoice data, and incentives for timely payments.

On taxation, many respondents said complex TDS and TCS rules continue to strain cash flows and administration, and more than half felt the Income Tax Act, 2025 would only partly deliver simplification and certainty. Overall, the report said the Union Budget 2026-27 should focus on execution-led reforms, simpler compliance and targeted fiscal support to unlock private investment and manufacturing scale.