Amid a third‑quarter rise in its Business Confidence Index, the industry chamber expressed confidence that reform momentum will be sustained in the Union Budget 2026‑27.
As the Confederation of Indian Industry (CII) Business Confidence Index registered its third consecutive rise to 66.5 points in Q3FY2026, the industry chamber has urged further steps to support the much-anticipated reform momentum in the Union Budget 2026‑27 to be presented on February 1.
The improvement is driven by optimism around demand, profitability, and investment conditions. Domestic demand remains the key driver, with two‑thirds of firms reporting higher demand in Q2FY2026 and 72 per cent expecting further growth in Q3FY2026, aided by GST rate cuts and festive consumption. Investment and hiring intentions remain robust.
“The steady rise in business confidence shows industry’s ability to navigate external headwinds, anchored by resilient domestic demand and a robust reform agenda,” noted Chandrajit Banerjee, Director General, CII.
While expressing confidence in the forthcoming Union Budget’s support for the reform momentum, the industry chamber has made several recommendations. These include boosting infrastructure creation, enhancing the country’s long‑term competitiveness, accelerating digitisation, expanding innovation and research and development, simplifying export tariffs, and a systemic fortification of the financial sector.
“Sustained reform and a strong industry-government partnership will enable India to maintain world‑leading growth while ensuring that opportunity reaches every household,” emphasised Banerjee.
A central pillar of the recommendations is sustaining capital expenditure, wherein a revitalised National Infrastructure Pipeline (NIP) 2.0 worth ₹150 trillion could be launched. The focus should be on shovel‑ready, revenue‑generating projects and streamlined dispute‑resolution mechanisms to accelerate infrastructure delivery and crowd‑in private investment.
In parallel, CII has called for robust development and strategic funding mechanisms to enhance India’s long‑term competitiveness. At the heart of this is the creation of an India Development and Strategic Fund (IDSF), which can serve as a sovereign‑anchored platform to mobilise large pools of domestic institutional capital and foreign investment. The IDSF could operate through two complementary arms. The first would be a developmental arm to support domestic priorities such as MSMEs, energy transition, and human capital, while the second would be a strategic arm to enable overseas acquisitions and partnerships to secure India’s long‑term economic and security interests.
CII has also suggested a ₹10 billion Digitisation Fund to accelerate India’s regulatory digitisation, advancing the unified enterprise identity, entity locker, application programming interface (API)‑based compliance, upgraded e‑Gazette and India Code, and a national compliance grid. These measures aim to eliminate duplication, enable real‑time data flows, and create paperless, virtual digital rails that cut compliance burdens and boost ease of doing business.
Innovation and Banking
Recognising that future growth will increasingly be powered by knowledge and technology, CII emphasises accelerating innovation and R&D. It suggests establishing ten Centres of Advanced Learning and Research (CALRs), each with a budget of ₹10 billion, focused on frontier domains such as AI, quantum, advanced materials, robotics, clean energy, and biotechnology. These could be operated through a public-private model with matched industry-government contributions. This could be complemented by an India Talent Agency in major global hubs to attract top talent, engage diaspora researchers, and position the country as a global innovation centre.
A simplified three‑tier tariff structure, with low tariffs on inputs and moderate tariffs on intermediates, has been proposed to strengthen India’s global integration through trade and exports.
Finally, a comprehensive strengthening of India’s banking ecosystem by enhancing the capital base of development financial institutions (DFIs), enabling selective non-banking finance companies (NBFCs)‑to‑bank transitions, allowing calibrated foreign equity, encouraging the entry of well‑capitalised new banks, and consolidating weaker institutions to improve scale and efficiency has been recommended.
To unlock liquidity and attract global capital, CII has recommended accelerating asset tokenisation across real estate, infrastructure, and financial assets. Building on Reserve Bank of India (RBI) and International Financial Services Centres Authority (IFSCA) pilots, a national asset tokenisation framework should define clear legal, regulatory, and tax provisions while standardising issuance and trading protocols. Leveraging GIFT City for initial pilots, expanding regulatory sandboxes, and developing vibrant secondary markets will deepen investor participation and support innovative fractional‑ownership models that modernise India’s financial architecture.