Budget 2026 focuses on long term growth but falls short on reviving private sector investment: Experts

Budget 2026 focuses on long term growth but falls short on reviving private sector investment

• Budget focuses on long-term growth via manufacturing and infrastructure
• Fiscal deficit pegged at 4.3 percent of GDP for 2026-27
• Experts say private sector investment boost is lacking

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The Union Budget 2026-27 despite focusing on long term growth with a push towards manufacturing and infrastructure has fallen short of attracting private sector investments, experts and economists say.

Niranjan Hiranandani, co-founder and managing director of Hiranandani Group said that the budget is really strong on long term investments in infrastructure, data centres, chips, defence, manufacturing but does not serve any short term benefits.

“So I think many of the industries will have to wait, invest, grow, and get the benefit of it. The overall growth story and the deficit, the GDP growth is very, very positive, and the long term growth in terms of the country, including real estate, looks very possible,” Hiranandani told Moneycontrol.

Gaurav Choudhury, Consulting Editor, Network18 noted that the big idea in the budget is that the government is not going to come under any pressure for incrementalism. “Urbanisation is going to be one of the strongest edifices of India's growth story particularly in newer, currently smaller towns, " he added.

The government in its Budget Estimates for 2026-27 has pegged the fiscal deficit at 4.3 percent of GDP. In the Revised Estimates 2025-26, the fiscal deficit has been estimated at par with BE of 2025-26 at 4.4 percent of GDP.

“I think there is a palliative in the form  of small savings figures which we think are going to beat the revised estimate for FY26 and therefore there should be more cash that the government will carry into FY27 that we have to actually bring down the borrowing numbers,” Aditi Nayar, Chief Economist at Icra.

Economists say that the budget clearly resisted any temptation to push growth higher this fiscal, or even fight the global situation.

“It's clearly guided by long-term growth objectives and motives. And I think the finance commission report that has come alongside and has been taken into consideration, ensures that the states now have a bigger role to play with a lot more now going from the centre to the states,” said Dipti Deshpande, Principal Economist, Crisil.

The budget has put a lot of focus on manufacturing and infrastructure, which experts believe, will remain key for growth and job creation.

The budget is providing continuity on movement in that direction with the announcement of Rs 10,000 crore SME growth fund, especially designed to turn small businesses into future champions, Rishi Agrawal, Co-Founder and CEO at TeamLease RegTech said.

Experts were however hoping the budget would boost private sector investments. “I was hoping the budget would do something substantial to build up the private sector investments. The private sector investment has been weak,” said Rajiv Kumar, chairmanship of Pahle India Foundation, former Vice Chairman of NITI Aayog.