New Delhi, Jan 28: As Finance Minister Nirmala Sitharaman is set to present the union Budget 2026–27 on February 1, industry stakeholders are closely watching for policy measures that could shape the future of the nation’s infrastructure and manufacturing sectors.
With the economy poised for growth, experts emphasise that clear, decisive action, particularly in public capital expenditure and timely fund disbursementwill be critical to sustaining momentum across key projects and industries.
For companies like MAN Industries (India) Ltd., which operate across oil & gas, water transmission, urban infrastructure, and pipeline projects, sustained government investment is not just desirable, it is essential. Nikhil Mansukhani, Managing Director of MAN Industries, underscores the importance of front-loaded and predictable public capex.
“Higher allocations and timely fund releases in water supply, irrigation, energy infrastructure, and city gas distribution will help stabilise order pipelines and reduce working capital stress across the infrastructure value chain,” he said.
On the manufacturing front, Mansukhani highlights the challenges of managing input costs amid volatility in steel prices and raw material availability, despite India being the world’s second-largest steel producer.
He stresses that policy interventions to secure raw materials, promote decarbonised steel production, and incentivise value-added manufacturing and technology upgrades under the Make in India framework could significantly strengthen global competitiveness.
Moreover, improvements in liquidity management and operational efficiency, through faster GST refunds, better access to working capital, and simplified compliance, could provide much-needed relief to manufacturers navigating an increasingly complex business environment. According to Mansukhani, these measures, when combined with sustained public investment, can help ensure that India’s infrastructure and manufacturing sectors remain on a robust growth trajectory.
The capital goods sector is expected to benefit from the government’s ongoing infrastructure-led growth strategy rather than fresh reforms, with a focus on sustaining high public capital expenditure, improving project execution, and supporting domestic manufacturing. Government capex surged 28% YoY to Rs 6.6 trillion between April and November 2025, led by core infrastructure projects. Strong order inflows continue across EPC and capital goods companies, driven by highways, railways, transmission, and defence projects, while rising demand for power equipment and defence indigenisation is boosting domestic sourcing. Private industrial capex is gradually improving, and the capex-to-revenue ratio has risen to around 0.30 in FY26-27, reflecting a shift toward asset creation.
Key challenges include execution delays in multi-year projects, high working capital needs for EPC companies, margin pressures from input and labour costs, and dependence on public sector order flows.
With global uncertainties and volatile commodity prices, the budget is likely to combine fiscal prudence with targeted interventions to strengthen industrial capacity without distorting markets.
Public capital expenditure will remain a key driver, focusing on logistics, industrial corridors, ports, power, and last-mile infrastructure to boost efficiency and competitiveness.
The manufacturing sector in India maintained a strong performance in Q3 FY26, with the FICCI Manufacturing Index reaching an all-time high, driven by positive business sentiment. According to the survey, 91 per cent of respondents reported stable or increased production, up from 87 percent previously, while 86 per cent saw equal or higher domestic orders, aided by recent GST rate cuts. Capacity utilization stood at around 75 per cent, supporting investment plans over the next six months despite operational challenges.
However, growth faces headwinds from geopolitical tensions, trade barriers, and operational constraints such as labour, raw materials, and regulatory policies. In exports, about 70% of companies expect stable or rising shipments, reflecting cautious optimism. Sectoral growth is led by electronics and electricals, with moderate expansion in capital goods and textiles.
