As the government begins its preparations for the Union Budget for the fiscal year 2026-27, leading consultancy firm EY India has laid out a crucial roadmap. The firm emphasizes that the upcoming budget must act as a powerful catalyst to solidify India's position as a global economic leader. The core recommendation revolves around a three-pronged strategy: prioritizing robust economic growth, providing unwavering tax certainty, and channeling investments into specific, high-impact sectors.
The Three Pillars of EY India's Budget Vision
EY India's pre-budget memorandum is built on a foundational framework designed to address both immediate and long-term economic needs. The first and foremost pillar is sustaining and accelerating the pace of GDP growth. The consultancy argues that the budget must introduce measures that boost consumption demand, particularly in rural areas, while continuing to fuel capital expenditure in infrastructure. This dual approach is seen as essential for creating a virtuous cycle of investment, job creation, and increased spending power.
The second, and equally critical, demand is for greater clarity and stability in the tax regime. EY India points out that predictable tax policies are a cornerstone for attracting both domestic and foreign investment. The firm specifically calls for a reduction in litigations and the establishment of a more transparent dispute resolution mechanism. Providing certainty on matters like transfer pricing and the treatment of emerging sectors like digital economy and crypto-assets is highlighted as a key step towards building investor confidence.
Focusing on Strategic and Targeted Investments
Moving beyond broad-based growth, the third pillar of EY's recommendations involves strategic, targeted investments in future-ready sectors. The firm advocates for significant budgetary support and policy incentives for areas that will define India's economic competitiveness. This includes:
- Green Energy and Sustainability: Boosting investments in renewable energy, green hydrogen, and circular economy models to meet climate goals and create new industries.
- Technology and Innovation: Enhancing funding for research and development (R&D), especially in deep-tech, artificial intelligence, and semiconductor manufacturing, to foster an innovation-led economy.
- Export-Oriented Manufacturing: Strengthening schemes like the Production Linked Incentive (PLI) and improving logistics infrastructure to make India a global manufacturing hub, particularly in electronics, pharmaceuticals, and specialty chemicals.
EY India also stresses the importance of skilling and education reforms to ensure the workforce is prepared for the jobs of the future. Aligning the National Education Policy (NEP) 2020 with industry needs through dedicated budget allocations is considered vital for harnessing India's demographic dividend.
Broader Economic Reforms and Fiscal Consolidation
While pushing for growth-oriented spending, EY India's blueprint also acknowledges the importance of maintaining fiscal discipline. The firm suggests that the government continue on the path of gradual fiscal consolidation, as outlined in the medium-term fiscal policy, to ensure macroeconomic stability. This involves optimizing expenditure, improving the efficiency of subsidies through direct benefit transfers, and focusing on higher-quality spending that yields long-term returns.
Furthermore, the memorandum touches upon the need for continued reforms in sectors like agriculture, healthcare, and financial services. Simplifying regulatory processes, encouraging private sector participation, and leveraging digital public infrastructure (like Aadhaar and UPI) to deliver services more effectively are seen as complementary measures that will amplify the impact of the budget.
In conclusion, EY India's submission to the Finance Ministry presents a comprehensive and forward-looking agenda. By balancing growth imperatives with fiscal prudence, and coupling tax certainty with strategic investments, the firm believes Budget 2026 can lay a resilient foundation for India to navigate global uncertainties and achieve its ambition of becoming a $5 trillion economy. The ball is now in the government's court to translate these recommendations into actionable policy in February 2026.
