Pre-Budget 2026-27: Economists Suggest Prioritising Private Investment Revival to Boost Business Growth

At a pre-budget consultation with Union Finance Minister Nirmala Sitharaman, leading economists highlighted that the government should prioritise reviving private investment and simplifying customs procedures to boost domestic business conditions. Economists stressed the importance of structural reforms that could drive India’s next growth phase, according to reports.

“The economists said that reviving the private investment cycle should be the central policy priority. They said that the Budget should focus on creating predictable conditions for businesses to invest,” Moneycontrol reported, citing sources.

Simplified Customs Regime

Economists, policymakers, and experts from academia also emphasised the need to simplify customs procedures to enhance trade efficiency, according to the report by Moneycontrol. Digitalising documentation and reducing clearance time, which could significantly lower transaction costs, are a few of the suggestions put forth by the panel. Further, they also said that customs procedure simplification will have an impact on competitiveness, which could reduce friction for exporters and manufacturers while enhancing the overall trade environment.

Non-Financial Reforms

Non-financial reforms such as simplifying regulatory frameworks, expediting clearances, and improving governance and judicial efficiency were also emphasised to sustain growth over the medium term, as per media reports. According to experts, such simplified and predictable policy reforms can boost productivity and attract long-term capital, they said.

Maintaining Fiscal Deficit

Economists also said that the Budget must adhere to fiscal deficit targets and maintain fiscal discipline while ensuring capital expenditure to support private investment.

Who Were Present at the Pre-Budget Meeting?

Leading economists from Crisil, JP Morgan, Axis Bank, and Morgan Stanley India were present, along with economists and analysts from Nomura Holdings, UBS Securities, and HSBC. Academicians from the SP Jain Institute, Gokhale Institute of Politics and Economy, and Indian Statistical Institute were also present at the panel.

Budget FY27 Developments So Far

Last month, Indian industries urged the government to take steps to clear the backlog of income-tax appeals, simplify tax deducted at source (TDS) rules, and ensure tax neutrality for fast-track demergers. According to media reports, the Central Action Plan for 2025-26 aims to dispose of two lakh cases and ₹10 trillion of disputed demand, but India Inc. warned that without differentiated timelines or capacity expansion, the backlog may remain. On the TDS front, the Federation of Indian Chambers of Commerce and Industry (FICCI) noted that the current structure adds unnecessary compliance burdens and suggested reducing them into three broad rate slabs and exempting B2B (business-to-business) payments.

Reports also suggested that the Union Budget for FY27 will likely be a blueprint to accelerate India’s vision for Viksit Bharat 2047, with the government planning to integrate five-year sectoral action plans for major segments including infrastructure, energy, technology, and pharmaceuticals.