Budget 2026 Aims to Make India Global Innovation & Manufacturing Hub: SBI

The Budget maintains policy continuity, tax predictability while attempting a fine balance between rural and urban, legacy and sunrise sectors.

"This year's Budget has both predictable and futuristic elements. The predictable part is the basic structure which remains focused on emerging and employment generating sectors. Infrastructure sector continues to be an anchor, with increase in proposed investments," he said in State Bank of India's 'Union Budget 2026-27 Analysis Report'.

There are many positives and opportunities for banking sector. Reinventing banking in rapidly changing context and keeping financial markets orderly and stable, thereby aligning with India's next phase of growth continues to be imperative for the sector, Setty mentioned.

The thrust on sunrise sectors which form the futurist part has announcements on Semiconductors, Data Centres, Carbon Capture Utilisation and Storage and Critical Minerals etc.

"Starting with basic fiscal math, the budgetary allocations are based on the assumption of nominal GDP growth of 10 per cent which appears prudent given the way inflation is panning out. This translates into a fiscal deficit estimated at 4.3 percent of GDP," he noted.

On the rural and agriculture side, the Budget has made some notable shifts.

"The focus will now be on high value products such as sandalwood, cashews, fisheries though Integrated development of 500 reservoirs, coconut promotion scheme to increase production, rejuvenating old, low-yielding orchards and expand high-density cultivation of walnuts, almonds and pine nuts," said the SBI Chairman.

There is also focus on expanding the use of AI in agriculture by integrating Agri Stack portals.

Emphasis on services, particularly tourism, orange economy and education are timely and complimentary to both proposed infrastructure expansion, connectivity and digital capex led future growth. High-Powered 'Education to Employment and Enterprise' Standing Committee will focus on the services sector as a core driver of Viksit Bharat.

The massive scale of specialised construction requires domestic supply chain of infrastructure equipment. Keeping this in mind, the Budget has proposed domestic manufacturing of high value and technologically advanced Construction and Infrastructure Equipment.

"On the financing side, to further strengthen the confidence of private developers an Infrastructure Risk Guarantee Fund will be set up to provide prudently calibrated partial credit guarantees to lenders," said Setty.

Accepting the reality of rapidly urbanising India, the Budget has tried to harness the power of urban agglomerations. Towards this end, city economic regions (CER) will be mapped based on their specific growth drivers and an allocation of Rs 5,000 crore per CER over 5 years for implementing development plans.

Setty said that in the sunrise sectors, the Budget has proposed scaling up of current Indian Semiconductor Mission by proposing India Semiconductor Mission (ISM) 2.0 to produce equipment and materials, design full-stack Indian IP, and fortify supply chains.

Keeping in mind the disruption in critical minerals, the existing National Critical Mineral Mission will be complimented by a dedicated Rare Earth Corridors to be established and exemption from BCD for capital goods import.

The people centric initiatives, ease of doing business and living measures which form the softer aspects of the tough decisions identifies the challenges that country faces, he noted.

- IANS