Budget 2026-27 must keep the growth momentum, Pg8

Key Highlights:

• Budget 2026-27 aims to sustain India's growth by enhancing competitiveness and strengthening domestic expansion.
• Defence sector to get a boost with capital outlay increased to 30% and DRDO allocation raised by ₹10,000 crore.
• A defence export promotion council to be established to achieve ₹50,000 crore in defence exports by 2028-29.
• National Critical Mineral Mission to be supplemented with a dedicated tailings recovery program.
• Remission of Duties and Taxes on Exported Products Scheme to receive higher budgetary allocation.
• Drone sector to receive financial support, including an increase in the production linked incentive outlay to ₹1,000 crore.

Detailed Insights:

• India's economic resilience in 2025 was due to the government's reformist measures, which should be continued in Budget 2026-27.
• Prioritizing productive capital expenditure and social sector spending can strengthen domestic growth levers.
• Establishing an eastern India defence industrial corridor can further promote defence indigenization.
• Clear guidance on acceptable transfer pricing models for Global Capability Centres is needed.
• Lowering the qualifying borrowing threshold for corporate bonds can diversify finance credit.
• Addressing disputes pendency in direct tax by prioritizing high-pitched assessments and filling vacancies at the CIT(A) level is essential.
• Removing restrictions for AEO-accredited groups will enhance trade efficiency.
• Further reduction in customs tariffs slabs can streamline the duty structure and address inverted duties.

Key Concepts Involved:

• Fiscal Consolidation: Government strategy to reduce its debt and deficit over time.
• Defence Indigenisation: The process of producing defence equipment and systems within the country.
• Transfer Pricing: Setting prices for transactions between related entities in multinational corporations.