Union Budget 2026–27 Sets Course for Innovation, Manufacturing and Balanced Growth: SBI Chairman

January 02, 2026 : The Union Budget for 2026–27 marks a decisive move toward positioning India as a global centre for innovation and advanced manufacturing, with global competitiveness at its core, according to Challa Sreenivasulu Setty, Chairman of State Bank of India.

In the State Bank of India’s Union Budget 2026–27 Analysis Report, Setty said the Budget reflects strong policy continuity and tax predictability, while carefully balancing the needs of rural and urban India, as well as traditional and emerging sectors.

He described the Budget as a blend of stability and forward-looking measures. The core structure remains focused on employment-generating and emerging sectors, with infrastructure continuing as a key pillar supported by higher proposed investments.

For the banking sector, Setty highlighted several positives and new opportunities. He noted that as India enters its next phase of growth, banks must adapt to a rapidly changing environment while ensuring financial markets remain orderly and stable.

A major highlight of the Budget is its emphasis on sunrise sectors. These include semiconductors, data centres, carbon capture, utilisation and storage, and critical minerals, all of which are seen as essential for long-term economic resilience.

On fiscal assumptions, Setty said the Budget is based on a nominal GDP growth estimate of 10 percent, which he termed prudent in the current inflationary context. This underpins a projected fiscal deficit of 4.3 percent of GDP.

The rural and agriculture segments also see a strategic shift. The focus is moving toward high-value products such as sandalwood, cashews and fisheries. At the same time, the Budget proposes integrated development of 500 reservoirs, a coconut promotion scheme, rejuvenation of old and low-yield orchards, and expansion of high-density cultivation of walnuts, almonds and pine nuts. The use of artificial intelligence in agriculture will be expanded through integration with Agri Stack portals.

Services have received renewed attention, particularly tourism, the orange economy and education. These initiatives are aligned with infrastructure expansion, improved connectivity and digital capital expenditure. A High-Powered ‘Education to Employment and Enterprise’ Standing Committee will focus on services as a key driver of the Viksit Bharat vision.

Given the scale of upcoming infrastructure projects, the Budget also stresses the need for a strong domestic supply chain for construction equipment. To support this, domestic manufacturing of high-value and technologically advanced construction and infrastructure equipment has been proposed.

On the financing front, an Infrastructure Risk Guarantee Fund will be set up to provide calibrated partial credit guarantees to lenders, aimed at boosting confidence among private developers.

Acknowledging rapid urbanisation, the Budget proposes mapping City Economic Regions based on specific growth drivers. Each region will receive an allocation of ₹5,000 crore over five years to implement tailored development plans.

In sunrise sectors, Setty noted the proposal to scale up the existing Indian Semiconductor Mission through ISM 2.0, with a focus on equipment and materials manufacturing, full-stack Indian intellectual property design, and stronger supply chains. To address disruptions in critical minerals, the National Critical Mineral Mission will be complemented by dedicated Rare Earth Corridors and exemptions from basic customs duty on capital goods imports.

Setty concluded that the people-centric initiatives, along with measures to improve ease of doing business and living, reflect the government’s recognition of current challenges and its intent to address them through balanced and pragmatic policymaking. – IANS