Budget to boost consumption, strengthen economy: CII President

At a time when the global consumption scenario faces multiple headwinds, the union budget FY26, presented by union finance minister Nirmala Sitharaman on February 1, comes as a beacon of hope for economy, according to industry leaders. 

Sanjiv Puri, President, Confederation of Indian Industry (CII) and Chairman and Managing Director, ITC Limited, in an interaction with Business Today said that there have been several interventions that will either immediately, or overtime boost the country’s consumption. 

“The relief in personal income taxes is significant and is going to provide immediate relief and therefore boost consumption. There is also a lot of focus on rural India, agriculture, MSME, exports, industries focused on labor intensive sectors like footwear and toys. So, all these augers well for employment generation and therefore consumption over a period. So, I think strong steps in the budgets to boost consumption and strengthen the virtual cycle that the economy is currently facing,” says Puri.

Notably, manufacturing is one of the key focus areas in the budget. The government has announced Manufacturing Mission to boost the sector. As per Puri, the budget focuses on many important facets when it comes to competitiveness. 

Meanwhile, announcements made on artificial intelligence, research, and development as well as innovation will increase India’s competitiveness globally, according to Puri. “It has an opportunity for greater economic activity generation in the country, to develop our own IPs in this area. It is very important from both the perspectives, and both these are also riding on global trends. So, it is not just for domestic. We can be the global powerhouse. These sectors also play to our strengths. India is strong on its mentality and technology. These are areas where youth in India is strong, so it plays well,” says Puri. 

With regards to announcements on exports, Puri says that export has been facing hindrance owing to a softening in global demand. “Exports is an important sector. You're absolutely right, and it's an area that is facing increasing hindrance because global demand is soft and because barriers are coming. CII had also been advocating for an integrated review and the setting up of a committee across various ministries to sectorally focus on exports,” says Puri. 

According to Puri, the budget announcements on exports is a welcome step. “Sector related initiatives must come in. And a great example is what we have done in electronics. How can we replicate similar examples in other sectors, particularly labour-intensive sector. Integrated approach is the way to go because we will need to deal with the domestic drivers. We will also need to deal with FTAs in this. We will also need to deal with policy action for agile response on this whole trend of one geography dumping stock in India and rest of the world,” says Puri. 

According to Puri, steps such as exemption of customs duty on critical minerals and lithium-ion batteries will make the domestic value addition competitive. “Over a period, we have to develop a much stronger and much larger value chain and ecosystem in India. But these are the important steps that will enable that to happen,” notes Puri.