India Inc expects Union Budget to prioritise job creation

Over 72.2 per cent of respondents to a survey, conducted by CareEdge Ratings released on Tuesday, primarily from the services and manufacturing sectors, expect job creation and skill development to top the list of budget priorities.

This is premised on majority of the people job creation (59.8 per cent) and elevated food inflation (45 per cent) as the two major challenges for the Indian economy in the upcoming fiscal
year (FY26).

The other big vote (62.7 per cent) was for boosting consumption, with 61.5 per cent advocating capex revival.  A far smaller set of people sought support for export-oriented sectors (25.4 per cent) and fiscal consolidation (24.9 per cent).

In fact, some see uneven domestic consumption (36.7 per cent), widening geopolitical conflicts (34.9 per cent), and subdued external demand (23.7 per cent) as other key challenges for the Indian economy in FY26.

However, 52.7 per cent of participants believe that India’s medium-term economic outlook remains optimistic despite growth concerns. Almost 54 per cent respondents expect India’s real GDP growth in FY26 to be between 6 per cent to 6.5 per cent, while 17.2 per cent expect it to be less than 6 per cent. The rest expect it to be higher
than 6.5 per cent.

One big hope nursed by 71 per cent respondents is tax relief. 

Investment hopes

While the country is nowhere near the budget target of 17 per cent growth in capex in the current fiscal year, 40.8 per cent of respondents believe India’s capex will grow by 5-10 per cent in FY26 compared to FY25 actuals, 33.7 per cent expect growth between 11-15 per cent, while 15.4 per cent anticipate growth of more than 15 per cent. On the other hand, 10.1 per cent foresee growth of less than 5 per cent in FY26.

Additionally, 76.9 per cent of respondents expect an increase in infrastructure spending. This is followed by 67.5 per cent who expect more investment in job creation and skill development programs, 34.3 per cent in social welfare schemes, and 21.3 per cent
in subsidies.

The budgeted fiscal deficit for FY25 was set at 4.9 per cent of GDP. For FY26, 50.3 per centof respondents expect the fiscal deficit target to exceed 4.5 per cent of GDP. Another 28.4 per cent expect it to be at 4.5 per cent, and 21.3 per cent anticipate it to be below 4.5 per cent.

A total of 169 industry respondents participated in
the survey.