By NBFC sector by Mr Kapil Garg, MD of Mufin Green Finance.
“The Union Budget 2026 outlines a clear roadmap to strengthen India’s financial ecosystem and support growth through a well-structured reform agenda. With the government aiming to achieve robust GDP growth of around 6.8–7.2% and maintain fiscal discipline while accelerating investment, reforms in financial institutions are central to this vision.
The proposal to restructure PSU NBFCs such as Power Finance Corporation and Rural Electrification Corporation will help improve operational efficiency and capital utilisation, enabling them to support critical sectors like infrastructure, energy transition and rural electrification more effectively. These moves will enhance credit flow in long-gestation sectors that are vital for India’s development. In addition, the Budget’s focus on expanding capital expenditure to a record ₹12.2 lakh crore highlights the government’s commitment to growth-led public investment.
The announcement to set up a high-level committee on banking and financial sector reforms is a significant step toward aligning the financial ecosystem, including NBFCs and banks, with India’s long-term goals. This committee can help refine regulatory frameworks, improve risk management, and ensure that NBFCs play a complementary role in credit delivery alongside banks. Overall, these measures will strengthen credit access for MSMEs, infrastructure, and underserved markets, making NBFCs effective partners in India’s journey towards a developed and inclusive economy.”