India’s Confederation of Indian Industry (CII) has called for sustained economic reforms in the upcoming Union Budget 2026-27, with a sharp emphasis on strengthening domestic demand. In a comprehensive report released today, CII highlighted that robust household consumption remains the cornerstone of India’s growth story amid global uncertainties.
The industry body pointed out that private consumption, which accounts for nearly 60% of India’s GDP, has shown promising recovery post-pandemic but requires targeted interventions to sustain momentum. ‘With inflation cooling and rural incomes rising, now is the time to double down on measures that enhance purchasing power,’ stated CII Director General Chandrajit Banerjee.
Key recommendations include expanding direct benefit transfers, accelerating infrastructure spending in rural areas, and introducing tax incentives for consumer durables. CII also advocated for simplifying GST slabs to make everyday goods more affordable, arguing that this would unleash suppressed demand across urban and rural markets alike.
Looking ahead, the report warns of potential headwinds from geopolitical tensions and slowing global trade. To counter these, CII proposes a ‘domestic-first’ strategy, prioritizing Make in India initiatives that create local jobs and stimulate internal markets. ‘Reforms must be bold and continuous; half-measures won’t suffice in a competitive world,’ Banerjee added.
Economists echo this sentiment, noting that India’s domestic market resilience has been a buffer against external shocks. Recent data from the National Statistical Office shows urban consumer spending up 7.2% year-on-year, while rural demand for FMCG products has surged 9%.
As Finance Minister prepares the budget, CII’s blueprint offers a roadmap for inclusive growth. By focusing on demand-side reforms, India can aim for an 8% GDP growth trajectory, solidifying its position as the world’s fastest-growing major economy. The ball is now in the government’s court to act decisively.