Finance and Corporate Affairs Minister Nirmala Sitharaman will hold pre-Budget consultations with industry captains on December 30.

The meeting, scheduled a month before Sitharaman will present her eighth consecutive Budget in the Parliament, comes at a time when the Indian economy is grappling with signs of a slowdown.

After robust growth over the last three years, the economy seems to have slowed down in the first half of the current financial year, with both fiscal and monetary policy remaining restrictive. 

At their upcoming meeting with the Finance Minister, India Inc is now expected to pitch for measures to boost consumption, which is the largest component of GDP, to support high growth. 

While there has been some revival in private investments, global uncertainties—arising from sluggish economic recovery, geopolitical conflicts, and excess capacity in China, among other factors—continue to impede a broad-based recovery in private-sector investment.

Capex-led growth

Industry representatives are likely to pitch for measures that would steer the economy through challenging times with a bold and forward-looking fiscal blueprint, sources said. 

In their pre-Budget discussions with Sitharaman and top Finance Ministry officials, industry leaders and heads of apex chambers of commerce are widely expected to urge the Centre to continue with the capex-led growth strategy followed in the recent years.

This approach, which has been central to recent Budgets, is aimed at bolstering infrastructure, generating employment, and crowding in private investments.

Corporates believe that sustained public investment in infrastructure and logistics will not only create a multiplier effect on economic activity but also catalyse private investment.

Single window for regulations

In its proposals for Union Budget 2025-26, the CII has made a case for increasing the public capital expenditure by 25 per cent over 2024-25 (BE) to ₹13.9 lakh crore. Infrastructure related to rural areas, agriculture and the social sector (healthcare, education etc) should be given greater priority, CII has said. 

The new FICCI President Harsha Vardhan Agarwal recently told businessline that the apex chamber is advocating a 15 per cent hike in Central government capex for 2025-26.

Sitharaman has consistently emphasised the importance of balancing growth with fiscal prudence. The CII has now said that the Union Budget 2025-26 should make interventions to support all engines of growth while continuing on the glide path announced for fiscal deficit and bring it to 4.5 per cent of GDP in 2025-26.

A case has also been made by the CII to further improve the ease of doing business by bringing all regulatory approvals of Centre, States and local governments on the National Single Window System (NSWS). 

All eyes on the Budget

With GDP growth expected to moderate this fiscal— from the 8.2 per cent recorded in 2023-24 —due to global headwinds and domestic constraints, the upcoming Budget is being keenly watched for measures that can reinvigorate growth.

Industry chambers such as the CII have emphasised that India’s real GDP must grow at a compound annual growth rate (CAGR) of 7.5–8 percent over the next 25 years for the country to achieve developed-nation status.

Industry representatives are expected to push for policies that enhance ease of doing business, incentivise investments and reduce the cost of capital, at the December 30 meeting. 

A demand for more targeted incentives to boost private sector participation in sectors like manufacturing, technology, and green energy, which are critical to sustaining long-term grow, is also likely to be put forward.