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Indian budget's focus to contribute over 1% to FY26 GDP growth: PHDCCI

04 Feb '25
2 min read
Indian budget's focus to contribute over 1% to FY26 GDP growth: PHDCCI
Pic: Adobe Stock

Insights

  • India's FY26 budget's strategic focus will contribute over 1 per cent to GDP growth, and enhanced focus on MSMEs will create several hundreds of thousands of jobs, according to the PHD Chamber of Commerce and Industry.
  • The FY26 budget is a significant step toward fostering entrepreneurship, innovation and investments, it said.
  • The rise in disposable incomes will drive consumer spending, it noted.
India’s latest union budget’s strategic focus will contribute over 1 per cent (100 bps) to the country’s gross domestic product (GDP) growth in fiscal 2025-26 (FY26), and enhanced focus on micro, small and medium enterprises (MSMEs) will create several hundreds of thousands of jobs, according to the PHD Chamber of Commerce and Industry (PHDCCI).

The FY26 budget is a significant step toward fostering entrepreneurship, innovation and investments, the industry body said in a release.

The focus on public-private partnerships (PPP) in infrastructure, along with 50-year interest-free loans for state projects, is expected to create a multiplier effect not only boosting India’s GDP, but also strengthening the economy, said PHDCCI president Hemant Jain.

The rise in disposable incomes will drive consumer spending, subsequently encouraging businesses to scale operations, increase investments, and expand production, PHDCCI noted.

The focus on the middle class and MSMEs will enhance consumption and production segments, and boost private investment, it said.

The key focus areas in the budget include taxation, power, urban development, mining, the financial sector and regulatory reforms.

Enhanced credit guarantee cover for micro-enterprises leading to additional credit in the next five years will strengthen MSMEs and manufacturing competitiveness with increased exports, Jain added.

Fibre2Fashion News Desk (DS)

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