In her Budget speech for 2026-27, Finance Minister Nirmala Sitharaman proposed initiatives to strengthen India’s banking system and improve ease of doing business. A key highlight was the plan to set up a high-level committee on Banking for Viksit Bharat to review the entire banking sector. The aim is to align the sector with India’s economic growth, ensuring stability, inclusion, and consumer protection.
Sitharaman emphasized the sector’s strengths like strong balance sheets, profitability, and widespread banking access, covering 98% of villages. The committee will suggest reforms to enhance efficiency, scale, and readiness for future challenges. The minister also suggested restructuring Power Finance Corporation and Rural Electrification Corporation to boost public sector financial institutions in the power domain.
Furthermore, a review of the Foreign Exchange Management Act non-debt instruments rules was announced to modernize the framework for foreign investments. The goal is to simplify processes and attract more global capital into Indian markets. Proposals to promote corporate and municipal bonds were put forth to deepen bond markets, encouraging larger issuances by municipal corporations for urban infrastructure funding.
To facilitate ease of doing business and foreign investment, non-resident individuals can now invest in equity instruments of listed Indian companies under the portfolio investment scheme. The proposed increase in the investment limit from five percent to ten percent for each individual aims to enhance liquidity in equity markets and attract diverse international investments. These measures aim to strengthen India’s financial system amid global uncertainties, receiving positive market responses.
