Collectively, the six Kartavyas outlined in the Union Budget 2026–27 create a stable and forward-looking policy environment for manufacturing-led growth.
15 Feb 2026 | 1 Views | By Rajnikant Behera, RSB Global
Union Budgets often shape expectations for the year ahead.. This year, the Budget reflects a steady policy direction, with continued emphasis on infrastructure-led growth, strengthening the manufacturing ecosystem and supporting MSMEs. While the announcements build largely on existing priorities, the Budget reinforces the importance of domestic capability creation as part ...
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Union Budgets often shape expectations for the year ahead.. This year, the Budget reflects a steady policy direction, with continued emphasis on infrastructure-led growth, strengthening the manufacturing ecosystem and supporting MSMEs. While the announcements build largely on existing priorities, the Budget reinforces the importance of domestic capability creation as part of India’s Atmanirbhar Bharat vision, which is increasingly being viewed not as an aspiration but as a practical requirement in a changing global environment.
It features six clearly defined 'Kartavyas' to successfully guide India in the next stage of economic growth. These Kartavyas together convey the government’s intent to augment the foundations of development led by manufacturing, with a strong push on creation of infrastructure, empowerment of MSMEs, industrial rejuvenation and demand led growth. The Budget delivers alignment, policy continuity and long-term investment confidence for the manufacturing sector, including automotive and auto components.
The Union Budget has identified Creating and Championing MSMEs as one of the six Kartavyas. Through the Tier 2 and a Tier 3 supplier base, MSMEs act as a backbone in capacity creation, flexibility and employment generation. Efforts to enhance access to credit, encourage cluster-based development, and to provide targeted capital support will seek to resolve the structural challenges, especially those concerning liquidity and scale. Measures are aimed at improving access to finance, encouraging cluster-based development and providing targeted capital support to address structural challenges, particularly related to liquidity and scale. Strengthening MSMEs will help improve productivity, support technology upgrades and improve quality standards, thus strengthening the overall manufacturing ecosystem.
Another important Kartavya highlighted in the Budget is the continued push for infrastructure development. Infrastructure investment remains one of the most effective enablers of industrial growth. Spending on roads, transport networks, logistics systems and industrial infrastructure helps reduce logistics costs, improve supply chain efficiency and support large-scale manufacturing operations. For the capital goods, construction-linked manufacturing, and automotive supply chains sectors, this enhances operational efficiency as well as generates demand through increased economic activity. To make Indian manufacturing competitive in the domestic and global markets, a strong infrastructure base is essential.
The Budget also calls attention to legacy industrial sectors. This shows that they are relevant to the industrial structure of manufacturing in India. The traditional engineering and manufacturing sectors use a significant workforce and contribution to industry. By better access to capital, infrastructure and industrial support systems we can support their modernisation to become more efficient and competitive. Additionally, there is focus on more balanced regional development by developing city economic regions, particularly in new geographies. Encouraging industrial activity beyond established manufacturing hubs can unlock new demand centres, and create employment opportunities closer to consumption markets.
Moreover, the emphasis on consumption-led growth is an important signal to the manufacturing sector from a demand perspective. Consumption is one of the key drivers for the automobile, mobility related industries. Policies that enhance economic stability, infrastructure development and employment generation reinforce consumer confidence. For investments and long-term production strategies, a steady demand environment is essential.
With manufacturing becoming increasingly technology-driven, sectors like semiconductors and rare earths are becoming more relevant across sectors like auto and industrial manufacturing. Strengthening our electronics and high-tech engineering capabilities will improve the resilience of the supply chain and reduce our critical technology and metals dependencies. This is in line with the larger goal of creating a manufacturing ecosystem that can support the needs of future products and processes.
Collectively, the six Kartavyas outlined in the Union Budget 2026–27 create a stable and forward-looking policy environment for manufacturing-led growth.
By focusing on infrastructure, MSMEs, industrial rejuvenation, regional development, consumption and advanced manufacturing capabilities, the Budget 2026 positions India for the next decade. It aims to build formidable resilience against external factors and solidify India's ambition to be a rule-maker, rather than merely a rule-follower, in the global economic order.
Rajnikant Behera is Executive Director of RSB Global. Views expressed are the author's personal.