Key Takeaways

• By Manish ShahIndia’s financial system has now crossed an important threshold.
• Today, households and enterprises that want credit can largely obtain it.
• Access to credit is no longer the binding constraint it once was.

Key Development 1

NewsBusiness NewsIndia Business NewsBudget 2026 expectations: Why the next phase of financial growth is affordable, smarter creditTrendingTop stocks to buyStock market todayTrump tariffsSilver price todayStandard deductionBudget 2026Gold price predictionTop stocks to buyStock market todayTrump tariffsSilver price todayStandard deductionBudget 2026Gold price predictionTop stocks to buyStock market todayTrump tariffsSilver price todayStandard deductionBudget 2026Gold price predictionBudget 2026 expectations: Why the next phase of financial growth is affordable, smarter creditTOI Business Experts / TIMESOFINDIA.COM / Jan 21, 2026, 08:30 ISTCommentsShareAA+Text SizeSmallMediumLarge Budget 2026: The next phase is not about simply pushing more credit into the system.

By Manish ShahIndia’s financial system has now crossed an important threshold.

Today, households and enterprises that want credit can largely obtain it.

Access to credit is no longer the binding constraint it once was.

Key Development 2

This would let households rebalance portfolios as their needs evolve, freeing capital for productive use rather than locking it in illiquid assets.Expanding the Tax Base by Valuing ComplianceAs we unlock liquidity, we must also broaden the tax base – through encouragement, not only enforcement.

The goal is simple: make formal and higher participation feel rewarding, not merely obligatory, and visibly recognize those who contribute most.Strengthening India’s Financial FrameworkTaken together, these ideas point to a common theme.

In the realm of the economy, they dissect macroeconomic trends and policy impacts.

It needs a system where liquidity is deeper, risk is shared more effectively, capital moves more freely, and compliance is aspirational.Budgets that enable these shifts may not announce themselves loudly, but they shape economic behaviour in lasting ways.That is the kind of financial architecture India can benefit from in its next phase of growth.(Manish Shah is MD & CEO of Godrej Capital)About the AuthorTOI Business ExpertsTOI Business Experts delivers insightful, exclusive and unique perspectives across diverse domains, offering a nuanced understanding of the Indian economy, personal finance, income tax, business, technology, and stock markets.

Key Development 3

Fixed-income instruments, particularly fixed deposits, need renewed relevance in household portfolios.Alongside, targeted tax benefits for fixed-income savings can deepen liquidity, strengthen Current Account and Savings Account (CASA) growth, and lower system-wide funding costs.

Yet household savings have increasingly migrated toward equity, not always by choice, but because tax structures favour it.

India does not need a larger financial system.

Combining compliance with tangible benefits such as dedicated service lines, straight through approvals wherever feasible, faster immigration or visa support, and premium government interfaces can restore the prestige of paying tax.

Key Development 4

The more relevant question now is whether the terms of finance such as the cost, tenure, liquidity, and risk sharing are aligned with the kind of long-term growth India is aiming for.Capital is available, but decision-making has now become more deliberate.

This is not about discouraging equity participation, but about restoring balance so asset allocation reflects suitability rather than tax distortion.A similar principle applies to household wealth locked in real estate.Real estate remains the single largest repository of personal wealth in India, yet capital mobility from property into financial assets remains constrained.

The most effective way to do that is through deepening the market.Well-designed guarantee and co-lending frameworks that are built on models like CGTMSE that allow risk to be distributed more efficiently between the government and lenders.

This creates space for longer tenures, smoother repayment structures, and greater borrower confidence, especially for MSMEs and first-time formal borrowers.Liquidity Is the Binding ConstraintLower cost of credit, however, cannot be sustained without adequate liquidity.

Key Development 5

It is about reducing the friction and cost around long-term borrowing without weakening discipline.

High-compliance taxpayers contribute disproportionately to fiscal capacity yet often feel least acknowledged.

India’s financial system needs stronger, more stable domestic funding.

TOI Experts Speak contributes a comprehensive and informed narrative across key facets of the contemporary landscape.

Key Development 6

When risk is shared intelligently, the cost of credit falls naturally.

In personal finance and income tax, their opinions and recommendations span investments, savings, and financial planning.

Allowing proceeds from real estate sales to be deployed into financial instruments at lower capital gains tax rates would unlock liquidity already within the system.

Tax compliance improves when it is visibly valued.

Key Development 7

Borrowers are not stepping back from finance, they are weighing certainty, affordability, and long-horizon comfort far more carefully than before.That is where Budget thinking for 2026 and beyond can play a catalyst for higher and more inclusive growth.From Credit Expansion to Risk SharingThe next phase is not about simply pushing more credit into the system.

Business insights delve into corporate strategies and market dynamics.

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