Sethurathnam Ravi on Union Budget 2026 Growth Insights

 

India’s Union Budget 2026 comes at a time of global uncertainty, geopolitical tension, and slower global demand. In this environment, fiscal choices matter more than ever.

Sethurathnam Ravi discusses fiscal prudence, manufacturing reforms, and investor sentiment after Union Budget 2026.

Sethurathnam Ravi, widely known as S. Ravi, former Chairman of the Bombay Stock Exchange and Founder and Managing Partner of Ravi Rajan & Co, believes this year’s Budget is not flashy but it is strategically strong.

According to Sethurathnam Ravi, the government has chosen discipline over drama. The Budget focuses on fiscal consolidation, long-term manufacturing, and digital infrastructure while avoiding populist overspending.

Who Is Sethurathnam Ravi

Sethurathnam Ravi, often referred to as S. Ravi BSE due to his leadership at India’s premier stock exchange, is a seasoned financial expert with decades of experience in capital markets, governance, audit, and public policy.

Why his view matters:

• Former Chairman of Bombay Stock Exchange
• Deep exposure to regulatory frameworks
• Advisory experience across financial institutions
• Strong understanding of public and private capital flows

His Budget interpretation combines market reality with governance insight.

Why Sethurathnam Ravi  Union Budget 2026 View Matters

The Union Budget 2026 is designed amid:

• Global supply chain disruptions
• Energy transition shifts
• Geopolitical conflicts
• Slowing export demand
• Rising capital costs worldwide

Sethurathnam Ravi sees this Budget as:

• Defensive yet strategic
• Focused on long-term capital formation
• Aligned with India’s 2047 Viksit Bharat vision

This is not a short-term political Budget. It is structured for sustained growth.

What Was Your First Reaction to the Union Budget

Sethurathnam Ravi describes the Union Budget 2026 as consistent, sensible, and long-term in orientation. He believes it balances fiscal prudence with strategic sectoral investments without resorting to excessive populism.

In simple terms:

• No dramatic giveaways
• No reckless spending
• Focus on long-term sectors like AI, semiconductors, MSMEs, and data centres
• Fiscal discipline maintained

He calls it “not glamorous, but defensively strong.”

What Has Been Done Well and What Is Still Missing Sethurathnam Ravi Assessment

What Has Been Done Well

According to Sethurathnam Ravi:

1. Fiscal consolidation maintained
2. Strategic allocation to semiconductors
3. AI and digital infrastructure push
4. Support for MSMEs
5. Data centre incentives
6. Capital expenditure above Rs 12 lakh crore

These moves signal long-term intent.

What Is Still Missing

However, he notes gaps:

• Limited startup ecosystem support
• Real estate reforms could be stronger
• Heavy manufacturing lacks strong push
• Rare earths underdeveloped despite reserves

Were Any Important Sectors Overlooked

Yes. Sethurathnam Ravi believes startups, real estate, heavy engineering, and rare earth production deserved more attention.

Why This Matters

India holds significant rare earth reserves but contributes only around 1 percent to global production. This is a strategic vulnerability.

Manufacturing startups also struggle with:

• Capital access
• Regulatory complexity
• Long gestation cycles

Without deeper reform, India risks remaining services-heavy.

Did the Budget Strike the Right Fiscal Balance Between Prudence and Growth

Yes, according to Sethurathnam Ravi. The Budget balances fiscal discipline with growth ambition.

India targets around 7 percent growth while:

• Avoiding excessive borrowing
• Controlling expenditure
• Maintaining revenue discipline

He emphasizes that growth fundamentals remain strong.

How Do You See Investor Sentiment and Market Depth Evolving Post Budget

Sethurathnam Ravi notes that Indian investors are resilient.

On Securities Transaction Tax:

• Some view increases as inevitable
• Could have been more calibrated
• Aim appears to discourage excessive derivatives speculation

Historical example:

When STT was introduced earlier, markets absorbed the change. 

Investor outlook:

• Stable long-term sentiment
• Reduced speculative froth
• Deeper capital markets over time

Does the Budget Adequately Recognise Services as India Primary Growth Engine

Yes. Sethurathnam Ravi believes services, especially IT and digital infrastructure, received meaningful support.

Key measures:

• Safe harbour rate revision to 15.5 percent
• Data centre tax incentives
• AI ecosystem support

India’s leadership in digital payments supports the ambition to become a global data hub.

However, he cautions that services alone cannot stabilize the rupee long term. Manufacturing depth is essential.

How Well Has the Budget Addressed Ease of Doing Business for Private Players in Manufacturing

Progress has been made, but core manufacturing remains underserved.

Positive areas:

• Defence
• AI
• Semiconductors
• Textiles

Missing areas:

• Heavy engineering
• Industrial machinery
• Export manufacturing clusters

Ease of doing business requires:

• Faster approvals
• Simplified taxation
• Predictable regulation
• Access to long-term capital

Policy can signal. Private capital must execute.

How Much of Renewable Growth Is Creating Real Economic Value

India adds renewable capacity aggressively every year.

Sethurathnam Ravi sees renewables as:

• Cheapest power source
• Fastest to deploy
• Safest option
• Most economical long-term

Key formats:

• Solar
• Wind
• Hybrid
• Round-the-clock renewable solutions
• Firm and dispatchable renewables

Economic Value Consideration:

The real metric is cost per unit of delivered power.

If renewables remain lowest cost, capital will continue flowing.

Risk:

Overcapacity without grid integration can reduce returns.

What Is the Single Most Important Structural Reform Missing from This Budget

Hard manufacturing scale-up is the biggest missing reform.

To reduce imports and strengthen the rupee, India must:

• Expand export manufacturing
• Deepen capital formation
• Improve banking support
• Align policy with private capital

Initiatives like Make in India and Atmanirbhar Bharat are strong in intent. Execution depth remains the key gap.

Are There Any Other Sectors That Deserve Greater Attention

Sethurathnam Ravi highlights:

Tourism

Why tourism matters:

• High employment generator
• Spans organized and unorganized sectors
• Strong multiplier effect

Banking Reforms

Banks now have stronger balance sheets.

Next growth wave could come from:

• Digital lending
• MSME credit
• Infrastructure financing

Financial and Operational Considerations for Businesses

If you are a business leader, consider:

• Aligning strategy with government priority sectors
• Exploring semiconductor supply chain integration
• Leveraging AI grants and incentives
• Structuring operations to benefit from safe harbour provisions
• Evaluating renewable integration for cost efficiency

Actionable Framework for Decision Makers

If You Are an Investor

• Focus on infrastructure-linked companies
• Evaluate semiconductor ecosystem firms
• Monitor renewable hybrid projects
• Avoid over-leveraged derivative trades

If  You Are a Startup Founder

• Consider manufacturing tech integration
• Explore government-linked procurement
• Seek AI and data centre adjacency opportunities

If  You Are a Policy Watcher

Track:

• Capex deployment efficiency
• Private capex follow-through
• Rare earth production expansion

Final Takeaways

Sethurathnam Ravi presents a balanced and pragmatic assessment.

This Budget:

• Is long-term in vision
• Avoids populist excess
• Prioritizes fiscal prudence
• Supports digital and semiconductor growth
• Leaves heavy manufacturing underemphasized

The real test lies in implementation.

India stands at a capital formation inflection point. Public capex is signaling. Private capital must respond.

If manufacturing deepens, rare earth production expands, and renewable economics stay favorable, this Budget may be remembered as strategically pivotal rather than politically dramatic.