KCCI Acknowledges Growth-Oriented Union Budget 2026-27, Seeks Further Simplification and Targeted Relief
Mangaluru: The Kanara Chamber of Commerce and Industry (KCCI), Mangaluru, has released its assessment of the Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman. While acknowledging the budget’s growth-oriented approach, the KCCI has also highlighted areas where further simplification and targeted relief are needed for businesses and taxpayers.
The KCCI notes the budget’s continued emphasis on fiscal consolidation, infrastructure development, manufacturing expansion, and support for MSMEs, alongside a focus on ease of doing business and a stable tax regime.
Positive Takeaways
The KCCI welcomes the continued thrust on several key areas:
- Public Capital Expenditure and Infrastructure Development: The increased allocation towards public capex and the proposed Infrastructure Risk Guarantee Fund are expected to stimulate private investment and positively impact construction, logistics, manufacturing, and services.
- Support to MSMEs and Creation of “Champion SMEs”: Initiatives like the proposed SME Growth Fund, enhancement of the Self-Reliant India Fund, and strengthening of the TReDS ecosystem are viewed as positive steps to improve access to capital for MSMEs.
- Manufacturing and Strategic Sector Initiatives: Schemes for electronics components, semiconductors, chemicals, textiles, container manufacturing, and capital goods are expected to enhance domestic value addition, reduce import dependence, and improve India’s global competitiveness.
- Stable Direct Tax Framework: The absence of major adverse changes in corporate tax rates and the continuation of concessional regimes provide certainty and predictability for businesses.
- Technology-Driven Governance and Compliance: Continued digitization and use of technology in tax administration are expected to improve efficiency and transparency.
- Job Creation and Employment Generation: The budget’s focus on employment through manufacturing expansion, MSME growth, and higher public capital expenditure is commendable. Support for strategic sectors and “Champion SMEs” is expected to generate large-scale employment.
Coastal Karnataka’s Expectations
The KCCI expressed disappointment over the absence of a dedicated Coastal Economic Corridor for the West Coast, a significant missed opportunity for Mangaluru and coastal Karnataka. The industry had anticipated fiscal support for the proposed “Silicon Beach” initiative, deeper investment in underutilized deep-water ports, and a mission-mode push for the blue economy. The exclusion of coastal Karnataka from proposed high-speed rail growth corridors also limits connectivity-led development. The KCCI urges the government to address this gap in subsequent policy actions, including the provision of focused incentives for GCCs, technology clusters, and port-based industries in Tier-II coastal cities.
Key Expectations and Suggestions
The KCCI outlined several expectations and suggestions:
- Further Simplification of Income-tax Law: With the transition towards the Income-tax Act, 2025, the KCCI urges the government to ensure that subordinate legislation, rules, and forms are issued well in advance, and that ambiguity-prone provisions are clarified through timely circulars.
- Data Centre: The KCCI highlights a Deloitte–KDEM study identifying Mangalore as a highly cost-efficient location for data centers. With stronger fiber and dedicated power, Mangalore can attract investment, jobs, and growth in digital infrastructure. The KCCI suggests that the government should consider incentivizing data center development in Mangaluru.
- Mangaluru Poised to Become a Global Medical & Spiritual Tourism Hub: The Union Budget 2026’s proposal to establish five Regional Medical Hubs via PPP mode presents a transformative opportunity for Mangaluru to solidify its status as a premier global healthcare destination. The KCCI proposes to leverage Mangaluru’s location in a “temple belt” to improve civic infrastructure and amenities in temple towns to improve the pilgrim experience and increase repeat travel.
- Missed Focus on Coastal Karnataka’s Agro Economy: While the KCCI welcomes the Coconut Promotion Scheme and dedicated programs for cashew and cocoa, it notes that unless the arecanut economy is also addressed, the overall impact may remain limited.
- Absence of Maritime Higher Education focus in Mangaluru: The KCCI notes the omission of establishing a Central Maritime University or dedicated maritime higher education institute in Mangalore, a long-standing local demand.
- Lack of clarity on identified clusters in Legacy Industrial Scheme: The KCCI notes that no list of clusters is provided in the speech regarding the proposed scheme to revive 200 legacy industrial clusters via infrastructure and technology upgrades, so inclusion of any local industrial pocket is not assured from the documents alone.
Conclusion
The KCCI believes that the Union Budget 2026-27 reflects a continued commitment to growth, stability, and structural reforms. With further fine-tuning and timely implementation, the proposals can significantly enhance India’s competitiveness and create a more conducive environment for business and investment. The KCCI looks forward to engaging with the Government and other stakeholders to provide constructive input during the legislative process.