Union Budget 2026-2027 – Staying on course of growth and reforms
Published on 01 Feb 2026
Budget 2026-27 has carried forward the foundations and work being done in past few years by focus on 1) creating Infrastructure to push trade and manufacturing 2) Defence production for security needs 3) Rural and urban Infra and 4) social welfare (schemes like G Ram G (MNREGA), Food security, agricultural subsidies and PM Kisan etc). The focus remains on making India a global hub for manufacturing, tourism, defence and technology.
Govt. has been able to hold on to fiscal targets (4.4% of GDP) despite major rationalisation in both income tax and GST rates in a single year is a big positive. It has been achieved by expenditure reduction on revenue account and 3% lower central Govt capex and much lower expenses by states on capex.
Markets have been spooked by lack of any direct announcements unlike last year, increase in STT rates on F&O and dashed hopes of LTCG reduction for FII’s. However, we believe that the Budget carries forward the focus on Infra, Renewables, defence, Logistics Clusters, Tourism, Value Added Farming, Data Centres etc which will help economy sustain strong growth momentum. We believe bottom-up approach will be a better way to play the current uncertainty. We remain constructive on Banks, NBFC, Automobiles, select staples, Jewellery, select durables, Hospitals, Defence, Ports and telecom stocks.
