PHDCCI Urges Budget 2026 Focus on Capex for India Growth

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AuthorKavya Nair|Published at:
PHDCCI Urges Budget 2026 Focus on Capex for India Growth
Overview

The PHD Chamber of Commerce and Industry (PHDCCI) has urged the government to prioritize public capital expenditure in the Budget 2026-27. Recommendations include robust investment in infrastructure like roads and railways to stimulate demand, lower logistics costs, and attract private participation. PHDCCI also stresses policy stability and targeted incentives for MSMEs to boost manufacturing-led growth and strengthen India's global competitiveness.

Infrastructure Push Vital

The PHD Chamber of Commerce and Industry (PHDCCI) is strongly advocating for a significant boost in public capital expenditure within the upcoming Budget 2026-27. This strategic investment, the industry body argues, is essential to maintain India's robust growth trajectory. PHDCCI emphasizes that funds directed towards roads, railways, ports, urban transport, water systems, and power distribution will directly stimulate economic demand.

Furthermore, these infrastructure investments are poised to lower long-term logistics costs for businesses, enhancing overall industrial efficiency. The chamber suggests aligning allocations with national initiatives like Gati Shakti and urban resilience programs. Such a focused approach, coupled with active private sector participation, could propel India toward achieving a 10% growth rate.

Strengthening Competitiveness and Growth

A decisive infrastructure push in the next budget is seen as a cornerstone for strengthening national productivity and improving industrial competitiveness. PHDCCI points to historical evidence where upfront infrastructure spending not only generates large-scale employment in construction but also de-risks projects, thereby attracting crucial private investment and reducing transaction costs. This creates a virtuous cycle for sustained medium-term growth.

Support for MSMEs and Manufacturing

For the nation's broader economic health, PHDCCI highlighted the critical need for manufacturing-led growth among Micro, Small, and Medium Enterprises (MSMEs). This necessitates policy stability and predictable incentives. The chamber recommends renewed focus on scaling manufacturing and MSMEs through capital support, tax rationalization, and production-linked incentives.

High input costs, long project maturation periods, and global uncertainties currently hinder domestic manufacturing capacity. To counter this, PHDCCI proposes rationalizing customs duties on essential raw materials and extending concessional tax benefits for new manufacturing units. Strengthening credit guarantees and industrial infrastructure are also vital steps to support MSMEs integrating into formal global value chains. Manufacturing's central role in job creation, export growth, and supply chain resilience makes the upcoming budget a key opportunity to solidify India's manufacturing base.

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