Sethurathnam Ravi on Union Budget 2026 Long-Term Growth

Introduction

Sethurathnam Ravi, former Chairman of the Bombay Stock Exchange and Founder and Managing Partner at Ravi Rajan & Co, also widely referred to as S. Ravi BSE, is a recognized authority in financial markets and strategic economic policy. With the Union Budget 2026 unveiled amid global uncertainties, slowing external demand, and geopolitical tensions, Sethurathnam Ravi offers a nuanced perspective that blends prudence with strategic foresight.

Sethurathnam Ravi shares insights on India’s Union Budget 2026 and strategic sectors

This analysis explores how the Budget prioritizes fiscal discipline, growth-focused investments, and strategic sectors, and what gaps remain in accelerating private investment and manufacturing-led expansion.

Sethurathnam Ravi First Reaction to the Union Budget

Sethurathnam Ravi describes the 2026 Union Budget as cautious, consistent, and strategically oriented. Key takeaways include:

• Long-term vision: Budget emphasizes growth priorities leading up to 2047.

• Fiscal prudence: Government maintains discipline, avoiding excessive allocations.

• Sector focus: Special attention to semiconductors, artificial intelligence (AI), micro, small, and medium enterprises (MSMEs), and data centres.

• Strategic orientation: Short-term measures are present, but the broader intent is sustained, structural growth.

“This Budget is clearly long-term in nature. Fiscal discipline has been maintained, and under the circumstances, it can be described as a reasonably good Budget, “says Sethurathnam Ravi, also known in market circles as S. Ravi.

What Sethurathnam Ravi Thinks Has Been Done Well and What Remains Missing

Positive Aspects of the Budget

1. Targeted sector support: Semiconductors, AI, MSMEs, and data centres are prioritized.

   
   

2. Savings emphasis: Encourages personal and corporate savings.

   
   

3. Strategic infrastructure: Rs 12 lakh crore allocated for public capital expenditure.

   
   

4. Fiscal balance: Government maintains discipline while targeting ~7% growth.

   
   

Areas That Could Improve

• Startups: Additional measures could have strengthened manufacturing-focused startups.

  
  

• Real estate: More policies to stimulate private investment in real estate could have been introduced.

  
  

• TDS reforms: Reduction in Tax Deducted at Source (TDS) could improve cash flow for businesses and individuals.

  
  

“While expectations around personal taxation benefits were high, last year already provided significant relief. The government has its own revenue compulsions,” notes Sethurathnam Ravi, also recognized as S. Ravi BSE.

Sectors that may have been overlooked

Despite several targeted initiatives, some sectors deserve more attention:

• Hardcore manufacturing: Limited policy support beyond textiles, defence, AI, and semiconductors.

  
  

• Rare earths: India holds substantial reserves but produces only ~1% of global output. Expanding this could reduce imports and generate revenue.

  
  

• Tourism: Largest employer spanning organized and unorganized sectors; stronger policy push could yield significant economic benefits.

  
  

• Banking reforms: Digital banking and stronger balance sheets could support future growth.

  
  

How the Budget addresses ease of doing business for manufacturers

Sethurathnam Ravi emphasizes that while some sectors received meaningful support, core manufacturing remains underdeveloped:

• Supported: Defence, AI, data centres, semiconductors, textiles.

• Gaps: Heavy engineering, core machinery, and traditional manufacturing need more robust incentives.

• Private investment: Most capital flows into infrastructure rather than manufacturing. Ease of doing business, regulatory clarity, and access to capital are essential.

Assessing economic value in renewable energy growth

India is rapidly adding solar and wind capacity, but the question is whether this translates into real economic value.

• Advantages:

  • Low cost of energy.

  • Fast deployment.

  • Sustainable and reliable sources.

• Strategic solutions:

  • Hybrid solar-wind models.

  • Round-the-clock (RTC) renewable power.

  • Firm and dispatchable (FD) renewable solutions.

“Ultimately, any form of power delivering the most economical cost will prevail. Renewables are positioned as clear winners in long-term energy strategy,” says Sethurathnam Ravi, or S. Ravi, in discussions with industry leaders.

The most important structural reform missing

Sethurathnam Ravi identifies hard manufacturing as the single most critical gap:

• Why it matters: Reduces imports, boosts exports, stabilizes the rupee.

• Implementation gap: Make in India and Atmanirbhar Bharat need deeper execution.

• Capital formation chain: Requires coordinated policy, private investment, banking support,

  and financial institutions.

  
  

“All stakeholders must work in harmony to scale up manufacturing,” he emphasizes, highlighting the perspective of S. Ravi BSE.

Other sectors needing more attention

Beyond manufacturing, additional sectors could accelerate growth:

• Tourism: Strategic investment can generate employment and boost regional economies.

• Banking & digital finance: Stronger digital banking adoption and bank lending capacity will accelerate MSME and startup growth.

• Rare earths & advanced materials: Strategic investment in domestic production can support high-tech manufacturing and national security.

Recognition of services versus manufacturing

While manufacturing gets headlines, services remain India’s primary growth engine:

• Supportive measures:

  • Safe harbour provisions for IT at 15.5%.

  • Tax incentives for data centres.

• Strategic focus: Aligns with India’s global digital payment leadership and ambition to become a data hub.

• Balanced approach: Budget ensures services and digital infrastructure remain competitive while nurturing strategic manufacturing sectors.

Investor sentiment and market depth post-Budget

• Securities Transaction Tax (STT):

  • Increment may have been inevitable but could have been implemented in a slab or volume-based approach.

  
  

  • Primary aim: curb excessive speculation in derivatives and F&O.

• Resilient investors: Indian capital markets historically absorb policy changes.

• Private capital: Flow depends on tax incentives, regulatory clarity, and ease of doing business.

Conclusion :

Sethurathnam Ravi’s perspective highlights that Union Budget 2026 is long-term, pragmatic, and strategically sound, even if not headline-grabbing. Key takeaways:

1. Long-term vision: Budget aligns with 2047 growth priorities.

   
   

2. Fiscal discipline: Government maintains balance while investing in strategic sectors.

   
   

3. Sectoral focus: Semiconductors, AI, MSMEs, and data centres are prioritized.

   
   

4. Gaps remain: Hard manufacturing, rare earths, tourism, banking reforms, and startups need more attention.

   
   

5. Private investment: Encouragement through tax incentives, ease of doing business, and regulatory clarity is essential.

   
   

6. Renewables: Positioned as cost-effective, reliable, and long-term energy solutions.