CII Urges Rs 14 Lakh Crore Infra Boost, Tax Cuts in Pre-Budget Pitch

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AuthorRiya Kapoor|Published at:
CII Urges Rs 14 Lakh Crore Infra Boost, Tax Cuts in Pre-Budget Pitch
Overview

The Confederation of Indian Industry (CII) is pressing the government for a significant pre-budget push, demanding capital expenditure exceeding ₹14 lakh crore for infrastructure in the upcoming fiscal. Recommendations also include rationalizing fuel taxes, incentivizing manufacturing, and unlocking pension funds for long-term projects to stimulate consumption and economic growth.

CII Pushes for ₹14 Lakh Crore Infrastructure Outlay

The Confederation of Indian Industry (CII) has laid out its demands for the upcoming Union Budget 2026, calling for a robust increase in capital expenditure and a sharper focus on manufacturing. Senior leaders emphasized sustained infrastructure spending as a critical driver for long-term growth.

Budget Likely to See Jump in Capex

Vinayak Chatterjee, Chairman of the CII Panel on Infrastructure PPP, anticipates the Union Budget will allocate approximately ₹14 lakh crore for infrastructure. This figure, representing 3.5% of the projected nominal GDP of ₹400 lakh crore, marks a substantial 27% increase from the previous budget's ₹11 lakh crore. This highlights the government's continued reliance on capital expenditure to navigate global uncertainties and uneven domestic demand.

PPP Projects and Pension Funds Eyed

Public-private partnerships (PPP) are central to the government's strategy, with Finance Ministry announcing a ₹17 lakh crore pipeline of 283 projects over three years. CII also flagged a potential structural reform: allowing pension funds, which manage over ₹16 lakh crore, to invest directly in infrastructure. This could provide patient capital for long-gestation projects.

Shift Towards Railways Expected

While road infrastructure has matured, Chatterjee suggests a sectoral shift towards railways in the next phase of spending. New-generation high-speed rail corridors are anticipated, aiming to boost logistics efficiency and support manufacturing.

Fuel Tax Relief and Manufacturing Incentives

Piruz Khambatta, Chairman of the CII Panel on Taxation, stressed the need for fuel tax rationalisation, proposing inclusion under GST or direct tax reduction. He argued that high fuel costs significantly impact manufacturing input expenses. Khambatta also advocated for pro-manufacturing measures, including incentives for new machinery, technology adoption, and R&D, asserting that boosting consumption and manufacturing are intertwined for overall economic growth.

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