What FICCI Wants from Upcoming Union Budget? 7 Key Demands

As India anticipates the Union Budget for FY26, the Federation of Indian Chambers of Commerce and Industry (FICCI) has outlined a set of crucial recommendations aimed at driving sustainable growth and development. Among its key demands, FICCI has called for a 15% hike in capital expenditure (capex) to maintain economic momentum in the face of global challenges. This move, according to FICCI, would help boost infrastructure, enhance reforms, and promote long-term growth across several key sectors.

TICE highlights the seven essential demands FICCI has made in its pre-budget memorandum to the finance ministry.

FICCI's Expectations from Budget

In its pre-budget memorandum to the finance ministry, FICCI emphasizes the need for strategic investments in infrastructure, reforms, and key sectors to safeguard India's growth trajectory amidst global uncertainties.

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The Federation argues that a significant increase in capex is crucial to maintaining the momentum of economic recovery, spurred by the ongoing challenges in the global economy. With inflationary pressures, supply chain disruptions, and geopolitical tensions, India’s growth prospects depend largely on its ability to invest wisely in long-term development. This, according to FICCI, requires robust government spending across critical sectors that can generate immediate economic benefits while positioning India for future prosperity.

Infrastructure: The Backbone of Sustainable Growth

FICCI’s call for a 15% hike in capex is largely focused on enhancing India’s infrastructure—both physical and digital. In the wake of the pandemic and subsequent economic disruptions, the need for modern, resilient infrastructure has never been more urgent. The Union Budget for FY25 had already set a record allocation of ₹11.11 lakh crore for capex, emphasizing productive spending over revenue expenditure. FICCI now wants to build on that foundation.

Infrastructure investment isn’t just about constructing roads or bridges; it’s about creating a robust framework that fosters balanced development. FICCI highlights the importance of strengthening physical infrastructure like transport, energy, and urban development, while also focusing on social and digital infrastructure to bridge regional disparities and enable wider access to services.

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Driving Reforms: Land, Labour, and Power

While infrastructure forms the backbone of economic growth, FICCI stresses that reforms in key areas like land, labour, and power are vital for unleashing India’s growth potential. India’s industrialization and modernization depend on simplifying these complex systems.

To this end, FICCI proposes the creation of inter-state institutional platforms, modeled after the GST Council. These platforms would help address issues that span state borders, streamline administrative processes, and build consensus for nationwide reforms. Such measures would foster a more business-friendly environment and attract investment, facilitating long-term, sustainable growth.

Simplifying Taxation: Enhancing Compliance and Confidence

Tax simplification is another focal point of FICCI’s memorandum. The body calls for rationalizing the multiple Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) rates into a simplified tiered structure, which would ease the compliance burden for businesses. Furthermore, FICCI recommends removing TDS/TCS on GST-related transactions to reduce unnecessary friction in business operations.

In a bid to foster greater transparency and taxpayer confidence, FICCI has also advocated for the establishment of an independent dispute resolution forum. This would not only expedite case resolutions but also reduce litigation, creating a more predictable tax environment.

Green Transition and Gender Equality: A Sustainable Future

As India moves towards its net-zero emissions target by 2070, FICCI stresses the importance of green policies that support this transition. The Federation urges the government to prioritize policies that promote clean energy, sustainable manufacturing, and environmental conservation.

Alongside environmental sustainability, FICCI calls for policies that boost workforce participation, particularly among women. Recognizing the economic potential of an inclusive workforce, the memorandum suggests tax exemptions for daycare expenses and the use of Corporate Social Responsibility (CSR) funds to establish women’s dormitories in manufacturing hubs. These measures, FICCI argues, will help women balance family responsibilities and careers, thereby increasing their participation in the workforce.

Strategic Defence and Agricultural Transformation

FICCI’s recommendations also extend to strengthening India’s strategic sectors, including defence and agriculture. In defence, FICCI advocates for the development of advanced technologies like artificial intelligence (AI) and quantum computing, to not only strengthen national security but also position India as a leader in defence manufacturing. To this end, the Federation proposes the establishment of a Defence Export Promotion Agency to enhance global competitiveness and drive exports.

Agriculture remains a critical sector for India’s economy, particularly in rural areas. FICCI calls for a mission to enhance agricultural productivity in the country’s bottom 100 districts, where yields are below national averages. This includes training 3 million farm technicians over the next five years, which would significantly improve farming practices and help lift millions of farmers out of poverty.

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Healthcare and Education: Investing in the Nation's Future

FICCI’s memorandum also emphasizes the need for increased investment in healthcare and education—two key sectors that directly impact India’s long-term development. FICCI recommends raising public health spending to 2.5% of GDP by 2025 and introducing policies that incentivize preventive healthcare, which would ultimately reduce the nation’s healthcare burden.

For education, FICCI calls for a national campaign to enhance foundational literacy and numeracy, a critical step in improving India’s human capital. The Federation also suggests offering e-Rupi vouchers for school fees and creating competition among educational institutions to drive improvements in quality.

Self-Reliance in Manufacturing: Reducing Dependency

Finally, FICCI highlights the need for India to reduce its dependence on imports by focusing on local manufacturing. A roadmap for manufacturing electronic components, particularly in high-demand sectors like semiconductors, would help strengthen India’s position as a global manufacturing hub. This, FICCI argues, is vital for creating jobs, stimulating innovation, and driving economic growth.

A Vision for India’s Future

FICCI’s pre-budget recommendations provide a comprehensive vision for India’s growth. From strengthening infrastructure and simplifying taxes to advancing green policies and boosting workforce participation, these recommendations reflect a forward-thinking approach to building a stronger, more resilient economy. If adopted, they could help India navigate the challenges of the future while ensuring that growth is both inclusive and sustainable.

As the government prepares for the Union Budget for FY26, it will need to carefully consider these calls for strategic investments and reforms. India’s future growth depends on it.

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