In a strategic push ahead of the Union Budget 2026-27, the Confederation of Indian Industry (CII) is advocating for policy measures that fortify domestic demand as the engine of economic expansion. The latest CII survey reveals strong optimism among businesses, with 72% of respondents citing household spending as the primary growth driver for the next fiscal year.

Delving into the details, CII underscores the need for fiscal stimuli tailored to middle-class aspirations. Proposals range from raising the income tax exemption limit to subsidizing electric vehicles and green appliances, aiming to spur immediate consumption spikes. ‘Domestic demand isn’t just an economic metric; it’s the lifeblood of our industries,’ remarked a senior CII official.

The report paints a vivid picture of sectoral opportunities: agriculture, where better procurement prices could boost farmer incomes; manufacturing, buoyed by PLI schemes; and services, fueled by rising disposable incomes. CII also calls for digital inclusion, urging expanded UPI-linked incentives for small transactions to bring the unbanked into the consumption fold.

Against a backdrop of moderating inflation at 4.5% and steady 7% GDP growth, these reforms could unlock ₹5 lakh crore in additional demand, per CII estimates. However, the body cautions against over-reliance on exports, given volatile global commodity prices and trade barriers.

Stakeholders from across the spectrum have welcomed the suggestions. ‘This is pragmatic advice that aligns production with consumption,’ said an economist from ICRIER. As deliberations intensify in North Block, CII’s vision positions domestic strength as India’s shield and sword in uncertain times, promising a virtuous cycle of investment, jobs, and prosperity.