Ludhiana, often hailed as the industrial powerhouse of Punjab, finds itself at a crossroads as the Union Budget 2026-27 unfolds with a futuristic vision centered on artificial intelligence, biopharma, and rare earth minerals. However, the city's world-renowned bicycle, textile, and engineering sectors are grappling with a stark reality of neglect, labeling the budget as "directionless" and failing to address the deep-seated structural crises paralyzing manufacturing in the region.
A High-Tech Vision with Ground-Level Gaps
Finance Minister Nirmala Sitharaman's budget presentation emphasized a high-tech roadmap aimed at propelling India into a new era of innovation and global competitiveness. Yet, for Ludhiana's industrial clusters, this vision feels distant and disconnected from their immediate struggles. Local textile, bicycle, and engineering hubs argue they have been sidelined in favor of emerging tech corridors and the North-Eastern states, leaving them to fend for themselves amidst mounting challenges.
Macro Ambitions and Micro Disappointments
The budget's headline figures, including a ₹12.2 lakh crore capital expenditure outlay and the establishment of a ₹10,000 crore SME Growth Fund, garnered cautious praise from some industry leaders. Amit Jain, chairman of the Confederation of Indian Industry (CII) Punjab, described these moves as "ambitious and non-political," acknowledging the importance of future-ready sectors like AI and cloud storage for long-term competitiveness.
However, Jain conceded that for Ludhiana's garment and sports goods sectors, the real test lies in "the fine print and execution." The optimism expressed by CII is not widely shared across the broader manufacturing community, which perceives a growing disconnect between policy announcements and on-ground realities.
The MSME Crisis and Fiscal Constraints
Badish Jindal, President of the World MSME Forum, issued a stark warning about a looming fiscal catastrophe, highlighting that interest payments now consume nearly 20% of the total budget, leaving scant resources for genuine industrial stimulus. Jindal pointed to a troubling pattern of "budgetary shrinkage" for small businesses, with MSME allocation reduced from ₹2.22 lakh crore to ₹2.11 lakh crore.
Further cuts include a drastic slash in employment guarantee (PMEGP) funding from ₹11,954 crore to a mere ₹2,548 crore, and skill development initiatives suffering a reduction of over 50%, with new ITI funding plummeting from ₹3,000 crore to ₹356 crore. "This budget is completely directionless," Jindal asserted. "Exports are declining while our trade deficit hits record highs. We are cutting the very tools meant to generate employment."
The Inverted Duty Structure Dilemma
For Ludhiana's iconic bicycle and textile industries, the most significant disappointment was the budget's silence on the Inverted Duty Structure. This issue forces local manufacturers to pay higher GST on raw materials than they collect on finished goods, effectively trapping their working capital in a complex web of government tax refunds. Avtar Singh Bhogal of the UCPMA expressed frustration, stating, "We were expecting a corrective measure to end this paralysis. The failure to act encourages bogus billing and destroys our competitiveness."
Punjab's Geographic and Economic Challenges
Industrialists in Punjab argue that the state's unique geography—landlocked and bordering a sensitive frontier—necessitates federal support to offset high logistics costs. Pankaj Sharma, president of the Association of Trade and Industrial Undertakings (ATIU), noted the absence of critical measures in the budget, including new freight corridors, sectoral PLI schemes for bicycle parts or tractor components, and interest subvention for modernizing aging units.
Sharma remarked, "The budget appears heavily focused on the North-Eastern states. Tier-2 and Tier-3 cities in Punjab have been left to fend for themselves." This sentiment underscores a broader feeling of abandonment in a region that has long been a cornerstone of India's industrial output.
Survival Over Growth: The Local Sentiment
As Ludhiana processes the implications of the 2026-27 fiscal roadmap, the prevailing mood in the "Manchester of India" is one of survival rather than growth. Sonu Nilibar, president of the Textile Merchants Association, encapsulated the local perspective, stating, "Punjab needs a package to stay relevant. Between the floods and the lack of industrial incentives, we are lagging dangerously behind."
The Union Budget 2026-27 may chart a course toward a high-tech future, but for Ludhiana's manufacturing sector, the immediate concerns revolve around structural reforms, financial support, and policy interventions that can revive an industry at the heart of India's economic landscape. Without addressing these issues, the vision of progress risks leaving behind the very engines that have driven industrial growth for decades.
