Meher Pudumjee ,Chairperson, Thermax Ltd
The Union Budget 2026 reflects a cautious stance on India’s development journey. At a time when India has the opportunity to lead the global energy transition, we were looking for a more ambitious, future-ready roadmap.
Securing a Green Frontier
Climate change is no longer just an environmental issue, but has implications across health, livelihoods, and the economy.
Addressing a greener future not only strengthens development efforts but also builds resilience for a sustainable tomorrow.
The proposed outlay of ₹20,000 crore over the next five years to support carbon capture, utilisation and storage (CCUS) technologies will help India pave a way to becoming an energy secure nation. Funding aimed to help scale up projects and improve technology readiness for wider end-use applications across sectors needs focus to achieve India’s net zero emission targets.
A sustainable transition is only possible if it is economically viable. This Budget provides some support through positive enforcements to Indian manufacturers, however, there is opportunity for much more, to accelerate its path to energy transition and security.
The Economic Survey had identified critical minerals such as copper, lithium, and cobalt as bottlenecks in India’s energy transition. But the Budget lacked a comprehensive approach to warrant supply chain resilience. The announcement of rare earth corridors in mineral-rich States such as Odisha, Kerala, Andhra Pradesh, and Tamil Nadu will only move to initiate domestic supply chains for the minerals essential for electric vehicles and renewable technologies. There is a longer path that will demand a lot more policy support.
The exclusion of the entire value of biogas while calculating the Central Excise duty payable on biogas blended CNG, will promote the use of new age green fuels – a step in the right direction.
India’s dependence on imported crude oil and natural gas has remained an issue of energy security. The Budget could have been inclusive of structural measures to accelerate domestic capacity building.
Ensuring Manufacturing Excellence
The renewed emphasis on the need to improve manufacturing is a key component of Budget 2026. With a focus on industries like pharmaceuticals, semiconductors, chemicals, capital goods, textiles, and sports goods, the government has outlined several structural incentives and policies that will boost the sector’s GDP contribution. These policies will aid the nation in constructing a robust manufacturing sector that is focused on innovation and expansion and less dependent on imports. This in turn would support the need for capital goods – a “derived demand” – again a welcome move.
By announcing a top-up of ₹2,000 crore in the Self Reliant India Fund, which was established in 2021 to provide assurance that micro enterprises have access to risk capital, the government reaffirmed its commitment to the MSME sector.
Furthermore, the availability of liquidity, with more than ₹7 lakh crore already provided to the MSME sector, offers the much-needed financial stability to the sector, to tide over market volatility and invest in capacity building and technology upgradation. All these efforts are expected to help the MSME sector grow faster and increase the capability of small businesses that contribute to the manufacturing and growth story of India.
Empowering Communities
The government has implemented various economic reforms towards creating employment, boosting productivity and accelerating growth. However, we need to see the effectiveness of these reforms – not just employment, but skills that enable higher salaries.
The renewed emphasis on the services sector to provide a pathway to fulfilling aspirations of a youthful India is welcome.
Additionally, the announcement to ensuring opportunities for every group of persons with disabilities through industry-relevant and specialised training is a step in the right direction addressing inclusion. However, there is a need to create a clear pathway that ensures employment.
Published on February 1, 2026
