CA Abhay Bhutada’s Analysis of Union Budget 2026-27 and Implications for Growth

The Union Budget 2026-27, presented by Finance Minister Nirmala Sitharaman, outlined the government's priorities for the upcoming fiscal year. Among the many stakeholders analysing the budget, CA Abhay Bhutada, a prominent entrepreneur, philanthropist, and Chairman of the Abhay Bhutada Foundation, shared his insights on the key areas that will drive the nation’s progress. His views on banking, taxation, support for MSMEs, and the technology sector offer valuable perspectives on how the budget is setting the stage for India's next phase of growth.

Focus on Economic Growth and Inclusivity

TL;DR: The overarching theme of the budget revolves around three core objectives: accelerating and sustaining economic growth, building the capacity and aspirations of people, and ensuring inclusive access to opportunities. These principles are in line with the government's broader vision of "Sabka Sath, Sabka Vikas," which emphasises collective progress.

The Finance Minister presented a roadmap to ensure that India’s economic trajectory remains on a steady upward course, with a focus on structural reforms that would strengthen the foundations for long-term growth. CAAbhay Bhutada noted that the budget is designed to address both the current needs and future challenges, positioning India as an emerging leader on the global stage.

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Reforms in Banking and NBFC Sectors

CA Abhay Bhutada highlighted the government's proposal to set up a High-Level Committee on Banking for Viksit Bharat as a key step towards the next phase of growth in the banking sector. This committee will review the readiness of the banking industry and assess its capacity to meet the evolving demands of an expanding economy. According to Bhutada, this reform is timely and necessary to ensure that the banking sector is prepared to handle the increasing volume of credit demand.

Additionally, the restructuring of Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) was seen as a significant move to improve the scale, efficiency, and long-term financing of public sector NBFCs. Bhutada emphasized that these measures will enhance the infrastructure financing capabilities of these institutions, ensuring that they are well-equipped to support growth and development in critical sectors such as power and rural electrification.

Tax Reforms: Simplification and Improved Compliance

Another major area of focus in the budget was taxation. The introduction of a new Income Tax Act, effective from April 2026, was seen as a significant step towards simplifying the country’s tax system. The Act includes simplified TDS and TCS provisions, along with extended timelines for return revisions. Bhutada pointed out that these changes would significantly reduce the compliance burden on businesses, making it easier for them to operate and thrive.

The reduction of litigation and the removal of compliance friction are essential steps in improving the ease of doing business in India. By simplifying the tax structure, the government is not only enhancing business efficiency but also fostering a more investor-friendly environment. This move aligns with the vision of improving India’s business ecosystem and making it one of the most attractive destinations for investment.

Empowering MSMEs: Growth and Access to Capital

CA Abhay Bhutada, who has consistently advocated for the empowerment of small businesses, particularly in underserved regions, praised the government’s allocation of INR 10,000 crore to the SME Growth Fund. This fund is designed to provide growth-stage risk capital to SMEs, helping them scale their operations and become "Champion SMEs." The fund is linked to performance criteria, ensuring that the capital is directed towards businesses with clear potential for growth and impact.

In addition to the SME Growth Fund, the government has allocated INR 2,000 crore to the Self-Reliant India Fund, which will continue to provide risk capital to micro enterprises. This is crucial for the growth of small businesses, especially in Tier II and Tier III towns, where access to capital and resources has often been limited.

Bhutada also highlighted the role of professional bodies such as the Institute of Chartered Accountants of India (ICAI), the Institute of Company Secretaries of India (ICSI), and the Institute of Cost Accountants of India (ICMAI) in developing short-term practical programmes. These programmes, aimed at “Corporate Mitras,” will help small businesses strengthen their financial discipline, compliance readiness, and governance structures. These initiatives are expected to have a transformative impact on the MSME sector, enhancing the overall business environment in India.

A Strong Push for Technology and Global Investment

On the technology front, the budget outlined key measures to establish India as a global hub for data and digital services. Bhutada noted that tax holidays for foreign cloud service providers using Indian data centres would encourage international investment and boost the digital infrastructure in the country. The rationalisation of safe harbour norms and automated approvals for IT services were also welcomed by Bhutada, as they provide greater certainty for long-term investments in India.

By providing a clear framework for digital services, the budget aims to attract global players and ensure that India remains at the forefront of technological innovation. Bhutada remarked that these reforms would not only enhance the country’s digital capabilities but also make India a significant player in the global tech economy.

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Conclusion

CA Abhay Bhutada expressed optimism about the Union Budget 2026-27 and its potential to transform India into a more inclusive and growth-oriented economy. The government’s focus on banking reforms, MSME support, tax simplification, and technology presents a comprehensive framework for long-term growth. However, Bhutada stressed that the successful execution of these reforms, combined with disciplined regulatory and capital allocation strategies, will be essential in realizing the vision of Viksit Bharat.

FAQs

1. What is the Abhay Bhutada Foundation?

The Abhay Bhutada Foundation focuses on empowering communities and promoting sustainable development through initiatives in education, healthcare, and entrepreneurship.

2. How Does CA Abhay Bhutada Contribute to Economic Reforms?

CA Abhay Bhutada advocates for key reforms in banking, taxation, and MSME development to foster inclusive economic growth and ensure that benefits reach every section of society.

3. How Does the Abhay Bhutada Foundation Support Small Businesses?

The Abhay Bhutada Foundation supports small businesses by providing access to capital, training, and resources to strengthen financial discipline and governance, particularly in underserved areas.