Gayathri Parthasarathy, Partner and Leader – Financial Services, PwC India
Union Budget 2026–27 reinforces the government’s dual priority of sustaining growth while maintaining fiscal discipline. Continued high capital expenditure in infrastructure, manufacturing, digital public infrastructure, and energy transition is expected to crowd in private investment and strengthen India’s long-term growth trajectory.
A key highlight is the strong emphasis on financial sector reforms. The banking system was described as healthier and more resilient—with improved asset quality, stronger balance sheets, and rising profitability. A high-level committee on banking has been proposed to align the sector with India’s next growth phase and help in achieving Viksit Bharat goals. This committee will undertake a comprehensive review of the banking sector’s structure, governance, and future readiness to meet India’s expanding credit needs, while safeguarding stability and consumer interests.
Public sector banks are set to see further governance and technology-driven reforms aimed at improving efficiency and competitiveness. The Budget also includes the restructuring of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC), alongside a comprehensive review of the Foreign Exchange Management (FEMA) (non-debt instruments) Rules.
Additionally, the Budget underscores the growing role of non-banking financial companies (NBFCs) in expanding credit access and calls for deeper insurance penetration. It further provides an incentive of ?100 crore for single issuance of municipal bonds of more than ?1,000 crore and introduces a market-making framework and total return swaps on corporate bonds—supported by tax measures such as raising the STT on futures from 0.02% to 0.05% and increasing STT on options premium and exercise of options to 0.15% from 0.1% and 0.125%, respectively.
Together, these measures point to a reform-led push to build a stronger, more inclusive financial ecosystem.
