Budget 2026: Building Resilience for a Vibrant Bharat

For decades, the Union Budget has been treated as a one-day spectacle judged by short-term market reactions rather than long-term national stamina. Budget 2026 resists that temptation. Any immediate market disappointment should be read not as failure, but as confirmation that India is choosing discipline over populism and strategy over sentiment.

Achieving a fiscal deficit of 4.3% while sustaining capital expenditure, expanding social investment and reaffirming a long-term commitment to reducing debt towards 50% of GDP is no small achievement. The Finance Minister has spread her bets responsibly across India’s multiple priorities and challenges. This Budget is not chasing applause; it is building confidence. India is decisively moving from reforming to performing.

Resilience through self-reliance

What stands out this year is the way self-reliance has been redefined, with Budget 2026 focused on strengthening resilience across both legacy and emerging sectors, recognising that competitiveness cannot rest on manufacturing alone. MSME support spans traditional industries such as engineering, handloom, textiles and handicrafts, alongside future-facing areas including bio pharma, semiconductors and rare earths, with targeted measures that broaden participation and enterprise ownership.

Revival of 200 industrial legacy clusters anchor this approach. Emphasis on technical textiles and mega textile parks reflects a deliberate move towards higher value manufacturing, while the 40,000-crore rupee allocation for semiconductor research and electronics manufacturing signals a serious commitment to building strategic capability. 

At the same time, self-reliance is no longer viewed narrowly. Services, tourism, green mobility and artisans are explicitly part of the growth architecture. Manufacturing builds momentum, services deliver scale, and together they create economic resilience.

Inclusion is treated as a growth strategy rather than a welfare footnote, with women-led enterprises, Divyangjan entrepreneurs and micro businesses being integrated into the economic mainstream. This is Viksit Bharat in practice, prosperity that is broad based, not concentrated.

Simplification and deregulation

Simplification is progress, but only when it is paired with trust. Budget 2026 takes several steps in the right direction through rationalised foreign asset and income disclosures, sunset provisions for the old MAT regime, reduced TCS rates, expansion of the customs single window, revised return timelines, and greater convergence between ICDS and Ind AS.

The decision to do away with ICDS and move towards closer alignment with Ind AS is particularly significant. Over time, this could reduce the long-standing disconnect between what companies report in their financial statements and what is recognised for tax purposes, lowering interpretational disputes and improving ease of compliance. Given Ind AS alignment with global reporting standards, the transition will need to be phased and predictable to avoid disruption, especially in areas such as capital classification, long term contracts and fair value-based accounting.

Simplification is also being pursued through institutional support, not just regulatory change. The proposal to create a cadre of corporate mitras in Tier 2 and Tier 3 cities recognises that for many MSMEs, compliance failure is a matter of capability rather than intent. Affordable, localised professional support can materially reduce friction and bring smaller enterprises into the regulatory mainstream with confidence rather than fear.

More fundamentally, deregulation must be anchored in materiality. Applying identical disclosure thresholds and penalties across vastly different firms creates compliance anxiety without improving outcomes. Materiality recognises that regulatory relevance is linked to a company’s size, assets and risk profile, not a static number. Embedding materiality as a governing principle would allow regulators to focus on what truly matters, strengthen trust, and free up entrepreneurial energy without compromising governance.

Faceless systems are welcome, but they must not become deaf systems. India has rightly exited the era where rules were meant to be broken. The next challenge is ensuring that minor foot faults are not escalated into prolonged disputes. What businesses need is not lower tax rates, but better tax reform, built on predictability, proportionality and engagement rather than enforcement.

Championing the mid-market

India’s enterprise ecosystem today is dominated by two ends of the spectrum: global champions and early-stage startups. What remains underdeveloped is the impetus for the middle market. The scaled, professionally run mid-sized enterprises that power economies like Germany, Japan and Korea.

Several Budget announcements speak directly to this gap: the ₹10,000 crore SME equity fund, top-ups to the Self-Reliant India Fund, expanded liquidity through TReDS, CGTMSE, GeM access and structured professional support through corporate partnerships. 

But the objective must be clear: not incentivising businesses to remain small but enabling them to grow without friction. India’s entrepreneurs. Whether backed by family offices, growth private equity, HNIs or venture capital, they are fundamentally part of the same private capital ecosystem. Economic opportunity will keep them invested in India. Ease of living and ease of doing business will determine whether they stay rooted here or look elsewhere.

Execution over exhibition

Budget 2026 is a statement of intent. It prioritises action, continuity and trust. If India stays the course, deepening its middle market, easing business and regulatory friction, and making materiality the compass for oversight, growth will follow. This is how India moves from ambition to execution, accelerating development and shaping Vibrant Bharat through empowered enterprises and robust governance.  

(Author is Vishesh C. Chandiok, CEO, Grant Thornton Bharat. Views are personal.)