Apex enterprise chamber CII on Thursday proposed a four-pronged fiscal technique forward of the Union Funds 2026-27 that features debt stability, fiscal transparency, income mobilisation and expenditure effectivity.
In response to a CII assertion, on the core of the roadmap is adherence to the federal government’s debt glide path focusing on 50 per cent (plus or minus 1 per cent) of GDP by FY31. Sustaining Central debt at roughly 54.5 per cent of GDP and the fiscal deficit at 4.2 per cent of GDP in FY27 will protect macro credibility whereas supporting progress. Strengthening public funds, nonetheless, should prolong past the Centre to States and City Native Our bodies (ULBs), whose fiscal positions more and more form total debt dynamics and the sturdiness of macroeconomic stability.
Second, to enhance predictability and reinforce institutional credibility, CII recommends reviving the Medium-Time period Fiscal Framework with a rolling 3-5 yr roadmap for income, expenditure and debt.
Third, income mobilisation stays central to long-term fiscal sustainability. India’s tax-to-GDP ratio at 17.5 per cent (centre and state mixed) stays under that of main rising economies.
“To finance the developmental wants of the nation, India wants to extend its tax-GDP ratio. Leveraging the info from India’s world-class digital infrastructure may assist detect tax evasion and increase tax base,” CII director normal Chandrajit Banerjee stated.
Better use of digital and AI-based instruments needs to be leveraged to increase the tax base by seamless information change between GST, earnings tax, and digital cost programs. Linking tax returns with high-value transactions and deploying superior analytics can allow real-time detection of evasion whereas reducing compliance prices, the assertion stated.
To unlock worth from public property, authorities ought to announce a three-year privatisation pipeline of Public Sector Enterprises (PSEs) within the non-strategic sectors as introduced within the ‘Strategic Disinvestment Coverage, CII additional acknowledged.
Fourth, expenditure administration, significantly subsidy reform, kinds the opposite pillar of the technique. Public Distribution System (PDS), overlaying 813 million individuals or 57 per cent of the inhabitants, faces challenges of outdated information and leakages. Updating beneficiary lists utilizing the most recent Family Consumption Expenditure Survey (2023–24), narrowing protection to the underside 15 per cent, and shifting in direction of money or voucher-based transfers can improve effectivity whereas additionally selling dietary diversification, the assertion stated.
Equally, fertiliser subsidies, which accounts for 39 per cent of whole central subsidies, ought to transition to a Direct Profit Switch (DBT) mannequin to curb misuse and promote balanced fertiliser use. Issuing the DBT quantity or fertiliser coupons earlier than sowing can deal with farmers’ considerations about upfront bills.
Centrally Sponsored Schemes (CSS), which represent 11 per cent of Central expenditure, additionally must be consolidated to scale back fragmentation. Prioritising high-impact areas akin to training, well being, skilling, and local weather resilience, whereas leveraging digital instruments for monitoring, can yield higher outcomes and monetary financial savings, the assertion stated.
CII additionally suggests encouraging states to acquire scores from a minimum of two reputed score companies for State Improvement Loans (SDLs) and linking a portion of central capital expenditure help to such scores and disclosures would incentivise prudence.
Apart from, CII has proposed a Systematic Modernisation and Useful resource Transformation (SMART) Cities Enablement Mission anchored in a Nationwide Digital City Platform to construct capability in municipal finance, governance, and digital service supply. A Fiscal Well being Index for ULBs, modelled on NITI Aayog’s index for states, would permit benchmarking, transparency, and reform-linked incentives, making a virtuous cycle of improved funds and higher service supply.
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