CII Calls for Strong Investment Strategy in Union Budget FY27

As Finance Minister Nirmala Sitharaman is preparing to present her ninth Union Budget in February 2026, the Confederation of Indian Industry (CII) has submitted their proposals, suggesting a "comprehensive investment strategy anchored in fiscal prudence, capital efficiency, and investor confidence". It stresses the Union Budget for 2026-27 to be a growth-orientated budget and urged the government to focus on investment policies. According to CII Director General Chandrajit Banerjee, the budget will play two roles at once: it should stabilise the economy while ensuring growth.

CII has proposed a wide-ranging investment strategies that focuses on careful use of public money, efficient spending, and building confidence among investors. The plan highlights the importance of both government-led projects and private sector participation.

Public Spending to Drive Growth

CII has emphasised that public capital expenditure has been the backbone of India's recovery after the pandemic.

To keep this momentum, the organisation recommends the central government raise capital expenditure by 12 per cent in FY27 with a 10 per cent increase in capital support given to states. The investment should be channelled to the sectors that create large economic benefits, such as transport, energy, logistics, and projects linked to the green transition.

In order to ensure that the projects are chosen to help growth, the organisation recommends a Capital Expenditure Efficiency Framework, a system to identify high-impact projects, monitor their progress, and measure their results in terms of productivity and regional benefits.

CII has also called for the launch of a new National Infrastructure Pipeline (NIP) 2.0, a massive programme worth 150 lakh crore rupees, to give long-term certainty to investors, developers, and state governments through the years 2026 to 2032.

Incentives for Private Investment

Alongside government spending, CII has called for tax credits and easier compliance rules for firms that achieve significant milestones in new investment, production, or tax contributions, as, according to the organisation, it would encourage private companies to make more investment. Moreover, this would motivate businesses to reinvest their profits into expanding capacity in fast-growing areas such as clean energy, electronics, semiconductors, and logistics.

CII has also suggested bringing back accelerated depreciation benefits. It allows companies to claim higher deductions in the early years of an investment, reducing their tax burden. This would act as a consolation for manufacturing industries and small and medium enterprises (MSMEs), who modernise and upgrade technology. However, CII has noted that this must be designed meticulously so that it does not trigger extra tax obligations under the Minimum Alternate Tax (MAT) system.

Attracting Long-Term Global Capital

To bring in more foreign investment for priority sectors, CII has proposed setting up an NRI Investment Promotion Fund, which would act as a holding company jointly owned by the government and private players, with the government holding up to 49 percent. The fund is intended to channel investments from Non-Resident Indians (NRIs), foreign portfolio investors (FPIs), and institutions into areas such as infrastructure and artificial intelligence.

Strengthening Sovereign and Institutional Funds

CII has also recommended strengthening the National Investment and Infrastructure Fund (NIIF). It has suggested forming a Sovereign Investment Strategy Council to ensure that investments are aligned with national priorities, managed with strong governance, and compared with the performance of leading global sovereign funds. Sovereign funds are investment funds held by the government that help the country develop its wealth over time.

Loan from Abroad

Another idea is to make External Commercial Borrowing (ECB) easier. Indian businesses borrow money from international lenders through ECB. CII has advised that infrastructure and manufacturing projects be able to borrow more money, pay it back over a longer period of time, and get partial risk coverage. This would let Indian businesses get money from around the world while keeping their foreign debt manageable.

CII has also asked for a single-window clearance system to help bring in a lot more foreign direct investment (FDI). This would let corporations get permissions from just one government department instead of having to travel to several. Dedicated facilitation cells at the state and central levels would handle proposals. They would automatically approve them within 60 to 90 days.