The Union Budget 2026 underlines the government’s intent to build long-term economic resilience through higher public spending, strategic investments and measures aimed at crowding in private capital, according to Sushant Sarin, Managing Director – Strategy & Commercial Risk Solutions, India, Aon. In his response to the Budget, Sarin said the allocation of Rs. 12.2 lakh crore towards capital expenditure reflects India’s determination to invest in future-ready infrastructure, while the Rs. 7.5 lakh crore earmarked for defence reinforces the government’s focus on national security and strategic preparedness.
A key announcement highlighted in the Budget is the proposed Infrastructure Risk Guarantee Fund, which is designed to provide credit guarantees to de-risk large-scale projects. The move is expected to encourage greater private sector participation by improving project viability and investor confidence. The Budget also signals a strategic shift towards industrial self-reliance with the announcement of rare earth corridors and chemical parks. These initiatives aim to reduce import dependence, strengthen domestic manufacturing capabilities and support critical supply chains.
“This is a budget that speaks to ambition and resilience,” Sarin said, adding that the policy thrust positions India to compete more effectively on the global stage by aligning infrastructure development, defence preparedness and manufacturing growth with long-term economic objectives.