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Informist, Sunday, Feb. 1, 2026

 

MUMBAI - Following is a summary of first views of bankers, economists, industry honchos, and market experts on the Union Budget for 2026-27 (Apr-Mar), presented in Parliament by Finance Minister Nirmala Sitharaman on Sunday:

 

BANKERS

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SOUTH INDIAN BANK CFO VINOD FRANCIS

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The Union Budget 2026–27 offers a balanced, forward-looking roadmap that pairs growth support with fiscal prudence. Targeting a fiscal deficit of 4.3% of GDP while boosting capital expenditure to 12.2 lakh crore (INR 12.2 trillion) underscores a commitment to infrastructure-led expansion and macroeconomic stability.

It strengthens the banking sector via a proposed High-Level Committee under the Viksit Bharat vision, alongside measures to enhance credit delivery and deepen financial markets, at a time when banks enjoy stronger asset quality and profitability. The Budget's push for MSME (micro, small, and medium enterprises) development, through expanded equity support, liquidity infusions, and credit guarantees, will improve financing access for small businesses and fuel nationwide entrepreneurship. Structural initiatives like India Semiconductor Mission 2.0, high-speed rail expansions, and targeted aid for manufacturing and emerging sectors promise greater competitiveness, job creation and economic resilience.

 

Taxation tweaks, including securities transaction tax adjustments and eased compliance timelines, strike a measured balance between revenue and reform. Overall, this Budget advances productivity-led growth and domestic resilience within a stable macro-fiscal framework. We welcome these steps and remain committed to sustainable expansion through prudent lending and customer-centric solutions.

(Gopika Balasubramanium)

 

ECONOMISTS

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RBL BANK CHIEF ECONOMIST ANITHA RANGAN

=======================================

With a steady spend on capex and keeping overall fiscal consolidation at 4.3% for FY27, gross borrowing inline with expectations and revenue growth inline with GDP growth, overall the budget manages spending with stability.

 

Focus on manufacturing, rural side and youth with policy continuity indicates that the Budget is more focused on continuity of reforms. While the increase in securities transaction tax has been a dampener for equity, it should recover with the growth focus. For debt market the gross borrowing number may be slightly higher and supply absorption especially from banks will remain the key focus. However fiscal consolidation and realistic assumptions is a positive that Budget numbers are achievable.
(Durgesh Nandan)

 

INDUSTRY LEADERS

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ASHOK LEYLAND CHAIRMAN DHEERAJ HINDUJA

======================================

Increased spending on infrastructure, manufacturing, and defence--along with continued emphasis on roads, logistics, and construction--is expected to accelerate economic growth and drive demand in the commercial vehicle sector.

 

The Budget also advances initiatives in artificial intelligence, rare earths, and energy transition while supporting key sectors such as healthcare, education, agriculture, housing, and electrification. Overall, it sustains growth momentum and strengthens India's long-term economic trajectory.

(Narayana Krishna)

 

DR REDDY'S CHAIRMAN SATISH REDDY

================================

In the Union Budget 2026, the pharmaceutical sector was the first to be highlighted in the Finance Minister's presentation, signalling its strategic importance. The emphasis on biologics and biosimilars is particularly timely, as India is at the cusp of taking a global lead in this space.

 

The 10,000-crore (INR 100 billion) Biopharma Shakti programme will be a key enabler for India's journey from volume to value leadership, helping the country move from being a global supplier of quality medicines to becoming a global innovator. Alongside the expansion of the national clinical trials network and strengthening of the CDSCO (Central Drugs Standard Control Organisation) with specialised scientific review and globally aligned timelines, these initiatives will enhance India's capacity to develop complex, high-value therapies.

 

The addition of new NIPERs (National Institute of Pharmaceutical Education and Research) and the upgrading of existing ones will expand opportunities for advanced scientific education and skills development, building the talent pipeline essential for innovation-led growth. Recognising the rising burden of non-communicable diseases, particularly cancer, the Budget also provides direct relief for patients by exempting basic customs duty on 17 cancer drugs and medicines, and extending import duty exemptions to seven additional rare diseases.

 

Combined with regulatory simplification through central–state coordination, these measures are set to strengthen India's biopharma ecosystem while ensuring patients in India and across the world.

(Narayana Krishna)

 

 

CIPLA MD-CEO-DESIGNATE ACHIN GUPTA

==================================

Viksit Bharat is anchored in a Healthy India and we are pleased to see health care take centre stage in the Union Budget 2026. It signals a strong commitment towards strengthening India's pharmaceutical and healthcare ecosystem, with a clear emphasis on innovation, research, and value-driven growth.

 

The prioritisation of long-term capacity and capability building through higher-end manufacturing, advanced therapies, and improved access to quality care is laying the foundation for greater self-reliance and enhanced global competitiveness.

(Narayana Krishna)

 

  

CII PRESIDENT RAJIV MEMANI

===========================

The Union Budget presented by the honourable Finance Minister aligns closely with our priorities. First, the focus on macroeconomic fundamentals--particularly linking fiscal deficit to the debt-to-GDP ratio--has been retained, which is very positive. Second, the reforms laid out in six categories are excellent: emphasis on reforms, manufacturing, simplification, and clearly identifying seven strategic sectors. Championing MSMEs (micro, small, and medium sector enterprises) through a new incremental equity support fund is a strong positive step.

 

Infrastructure allocations have risen again, including our recommendations for high-speed rail. For the first time, there's significant focus on middle-income India via IT (information technology) services, tourism, and related jobs. Tax simplification stands out, with safe harbour benefits for data centres, resolution of electronics manufacturing issues, and customs duty rationalisation for capex-heavy areas like nuclear power, MROs (maintenance, repair, and operations), and rare earths. Overall, it's a very positive budget: macroeconomic discipline, structural reforms, identified sectors, infrastructure, MSMEs, and city economic regions.

(Shreya Shetty)

FICCI PRESIDENT GOENKA

======================

Budget reflects continuity and stability. Data centres are one of the areas, announcements on which excited the industry body. The measures will bring in foreign inflows and generate employment as data centres include large investments.  

 

A high-level committee on banking will also hopefully reduce regulatory stresses that are there today and make life ready for future banking moves. The government meeting its fiscal deficit target of 4.4% of GDP gives the industry body confidence that whatever is being committed now will also be met going forward, Goenka said.

(Shakshi Jain)

 

SEA PRESIDENT SANJEEV ASTHANA

=============================

The Union budget was a critical opportunity to support India's agriculture and specifically the edible oil sector. The Solvent Extractors Association has been constantly representing the government that our edible oil imports have been skyrocketing and need urgent policy intervention. The Budget did not touch on measures that would reduce our dependence on the import of edible oil, in line with our Prime Minister's vision on Atmanirbharta in Edible Oil.

(Pallavi Singhal)

 

 

ASSOCHAM SECY GENERAL SANYAL

============================

The allocation for capital expenditure in the Union Budget for 2026-27 at INR 12.2 trillion fell short of ASSOCHAM's expectations of around INR 15 trillion. Infrastructure is linked to railways, roadways, manufacturing, and power. Unless capital expenditure is increased meaningfully, achieving a larger scale of growth becomes difficult. 

 

However, the government has included around 60% of ASSOCHAM's proposals, particularly across micro, small, and medium enterprises, logistics, sustainability, and emerging technologies. 

 

Despite the shortfall in capex, several of ASSOCHAM's key recommendations found place in the Budget. Out of about 25 suggestions submitted to the government, nearly 19 have been included. The rest of the proposals were not addressed adequately. 

 

Though the Budget proposed five new education hubs, it did not highlight the upgradation of the existing infrastructure. The Budget did not sufficiently address concerns around the cost of doing business and investment, particularly measures to attract foreign institutional and direct investment.

(Afra Abubacker)

 

 

UPL VICE PRESIDENT TYAGI

=========================

The Union Budget for FY27 did not directly address key concerns of the agrochemical industry, as it lacked rationalisation in customs duties to support domestic manufacturing. While allocations for agriculture could indirectly support demand for agrochemicals, the Budget did not ensure a level playing field between importers and domestic manufacturers.

 

The industry had sought lower import duties on raw materials and higher duties on ready-to-use formulations to incentivise domestic manufacturing. Despite the government's focus on ease of doing business, importing agrochemicals remains easier than manufacturing in India.

 

However, the industry welcomes the government's broader push to raise farmers' income through the promotion of high-value crops such as horticulture and plantation crops. India is already surplus in food grains, and previous Budgets had addressed pulses and oilseeds cultivation by announcing dedicated missions

(Afra Abubacker)

 

GIFT CITY MD AND GROUP CEO SANJAY KAUL

======================================

"The Budget provides strong long-term tax certainty for entities operating from India's maiden international financial services centre at GIFT City, significantly enhancing the country's offshore financial competitiveness. The extension of the tax deduction window to 20 years out of 25 years from 10 years out of 15 years, coupled with a clearly defined 15% tax rate thereafter, offers clarity and predictability that global financial institutions and investors look for when making long-term location and capital allocation decisions.

 

This policy stability strengthens GIFT City's position as a globally competitive financial hub within India's jurisdiction and reinforces confidence among banks, fund managers, exchanges, and other IFSC participants. The rationalisation of deemed dividend provisions for treasury centres is also a positive step, as it removes structural tax friction for multinational groups and facilitates efficient treasury and funding operations through GIFT City. Together, these measures make GIFT City an increasingly attractive destination for global financial and treasury operations seeking scale, certainty and regulatory alignment."

(Durgesh Nandan)

 

AMARA RAJA ENERGY CHAIRMAN JAYADEV GALLA

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Overall, the Union Budget is balanced and focused on long-term growth. The sustained focus on infrastructure, especially logistics, freight corridors and inland waterways, is critical for manufacturers as it directly lowers transport costs and improves supply chain reliability.

 

Focused support for domestic lithium-ion cell manufacturing, energy storage, and critical minerals, which are essential for reducing import dependence, is a positive step for the sector. The Budget strengthens confidence for manufacturers investing in advanced technologies and positions India well to emerge as a global hub for sustainable and future-ready manufacturing.

(Narayana Krishna)

 

 

PIRAMAL FINANCE MD, CEO JAIRAM SRIDHARAN

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A focused push to enhance competitiveness, productivity, and employment in high-potential sectors such as biopharmaceuticals, electronics, chemicals, and textiles--particularly across urban agglomerations beyond Tier-2 cities--aims to drive broad-based economic development. This should expand credit demand across a wider geographic footprint, supporting faster loan-book growth for non-banking financial companies and commercial banks. In parallel, continued fiscal consolidation, with the fiscal deficit as a percentage of GDP expected to decline further in FY27, should enhance liquidity and help lower borrowing costs for private corporate borrowers. Debt markets will keenly observe the evolution of the government's borrowing plan during the year though, which appears a bit inflated as far as gross borrowing is concerned.

(Janwee Prajapati)

 

 

SUNVIN GROUP CEO SANDEEP BAJORIA

=================================

There are no measures for oilseeds and edible oils in this Budget. The market had expected increase in allocation for oilseed sector. But we welcome the fact that there is no change in the custom duty. However, the Solvent Extractors' Association had urged for a uniform import duty across all crude edible oils, as the existing duty differences create market distortions in sourcing and substitution, undermining domestic refiners.

 

The effective import duty on refined edible oils including soybean, sunflower, and palm oil in India remains high at 35.75%, consisting of a 32.5?sic customs duty and additional cess and surcharges.

(Taniva Singha Roy)
 

 

SHRIRAM FINANCE EXECUTIVE VICE-CHAIRMAN REVANKAR

================================================

The Budget clearly signals continuity of intent on infrastructure and logistics, even if headline capex has not increased sharply. By reiterating the importance of infrastructure, logistics and river-linked transport, it strengthens India's ability to move goods efficiently and connect manufacturers to coastal and international markets. Over time, this should help ease bottlenecks, lower logistics costs and expand market access for Indian industry.

 

I am also encouraged by the emphasis on MSMEs (micro, small, and medium enterprises) and emerging indigenous sectors such as biopharma and food processing. India is a large food producer with the capacity to meet domestic demand while also serving global markets. With the right policy support, this focus can translate into stronger rural incomes and more resilient MSMEs.

 

On the funding side, while NBFCs (non-banking financial companies) already access international markets through bonds and syndicated loans, monetary transmission in India has traditionally been gradual. Rate cuts may not translate immediately, but a deeper and more efficient corporate bond market can, over time, meaningfully widen access to capital for industry.

(Shumaila Firoz)

 

 

TEXMACO RAIL MD SUDIPTA MUKHERJEE

=================================

"I find the Budget very loaded and there is an initiative to touch each and (every) individual aspect, and I mean all strata of the people. We belong to (the) railway sector, so as part of the industry, if we see that it has something for the legacy ones, the present industry, or the infrastructure-related companies, what we have in the country.
So when there is continued momentum on fund laying in infrastructure, there is growth. So definitely people will be benefited, new employment will be generated.

 

"If you ask me about my regret, there is a lot of focus on the capability, building new generation of industries, and all of this, but with the existing ones also I would have loved some incentivisation on IPR (intellectual propety rights) creation because even if we do maybe it doesn't romanticise us the way data centre does, but there are so many other components which are there in the infrastructure segment, even in railways, (in) which we are dependant on somebody outside. So if we develop within India under Atmanirbhar Bharat, there has to be some recognition for this IP creation for the country."

(Shakshi Jain)

 

 

PURAVANKARA MD ASHISH PURAVANKARA

=================================

The Budget strengthens the case for infrastructure led urban expansion, particularly around large magnet cities. Improved regional connectivity is enabling Tier-1 and Tier-2 cities attached to these metros to grow horizontally, easing pressure on core urban areas while expanding the effective city footprint.

 

This creates a powerful opportunity for real estate development in well-connected peripheral locations, where land remains relatively affordable and projects can be planned at scale rather than being constrained by dense inner-city limitations.

 

This shift also addresses one of the sector's core challenges--affordability. As connectivity improves, developers can access larger land parcels at more rational prices, making it viable to build integrated communities with housing, social infrastructure and open spaces.

(Narayana Krishna)

 

 

CAPRI GLOBAL MD RAJESH SHARMA

==============================

The Union Budget 2026 places NBFCs (non-banking financial companies) firmly at the centre of India's next phase of financial sector reforms, while also providing a clear boost to indigenous manufacturing and service sectors as a step towards Vikshit Bharat. By outlining a roadmap for NBFC credit expansion and technology adoption, and by proposing a high-level committee to review the broader banking and financial landscape, the Budget recognises the critical role financial services sector plays in bridging credit gaps, particularly for MSMEs (micro, small, and medium enterprises) and underserved borrowers. The continued emphasis on MSMEs through dedicated growth and self-reliance funds is also encouraging, as it will help unlock equity capital and accelerate the growth of high-potential enterprises. Overall, the Budget reinforces the pivotal role of NBFCs in improving last-mile credit access while supporting sustainable, investment-led economic growth.

(Gopika Balasubramanium)

 

 

CROPLIFE CHAIRMAN ANKUR AGGARWAL

=================================

CropLife India welcomes the launch of ‘Bharat Vistaar', a multilingual, AI-powered digital platform aimed at strengthening last-mile delivery of agricultural knowledge and the Budget's emphasis on high-value crops as an important avenue for income diversification.

 

However, digital advisory delivers results only when it is backed by effective on-ground extension systems that ensure guidance reaches farmers in time and is applied correctly in local conditions. Farmers today operate in a far more complex risk environment. Climate variability is increasing uncertainty, pest pressures are changing, and resistance is affecting the performance of older solutions.

 

Farmers moving into high-value crops must meet stricter quality and food safety standards. Addressing these realities requires sustained investment in crop science, faster access to newer and low-dose technologies, and policies that help farmers manage costs, protect yields, and comply with good agricultural practices and international standards such as maximum residue limits.

(Afra Abubacker)

 

 

MUTHOOT MICROFIN CEO SADAF SAYEED

=================================

Budget 2026–27 marks a strategic evolution in rural development, moving beyond credit access to enterprise creation. The expansion of Lakpati Didi into She-Marts and community-owned retail outlets represents a transformative shift, enabling women to transition from beneficiaries to business owners within formal value chains.

 

The focus on fisheries, animal husbandry, and high-value agriculture through credit-linked programmes directly strengthens income diversification for rural households. Combined with the Rs 10,000 crore (INR 100 billion) MSME growth fund and enhanced capex allocation of Rs 12.2 lakh crore (INR 12.2 trillion), these measures create a robust ecosystem for sustainable livelihoods at the grassroots.

 

For microfinance institutions, this Budget supports our core mission, building enterprises that generate consistent cash flows and strengthen repayment capacity. The integration of innovative financing instruments with digital infrastructure will be critical to scaling these interventions responsibly.

(Shumaila Firoz )

 

 

BAJAJ BROKING MD, CEO MANISH JAIN

=================================

From a capital markets point of view, Budget for FY27 is all about building on the confidence factor rather than focusing on short-term momentum. The glide path on fiscal deficit, the commitment to capital expenditure of INR 12.2 trillion, and the overall focus on manufacturing-driven growth indicate stability in the overall macro framework of India. From a capital markets point of view, this provides a conducive environment for long-term capital formation and visibility.

 

Overall, the focus on infrastructure, semiconductors, bio-pharma, and strategic manufacturing is a positive factor for the overall investment story of India and broadens the investment universe beyond a specific set of sectors. Although increased transaction costs in specific sectors of the capital markets may affect trading sentiment, overall continuity and fiscal prudence would be much more important factors for long-term investors. We expect the capital markets to increasingly reward quality, balance sheet, and businesses that are structurally aligned with India's growth themes.

(Durgesh Nandan)

 

 

PARADIGM COMMODITY FOUNDER-CEO BIREN VAKIL

==========================================

The agricultural sector has been more or less ignored and there have been no changes to the customs duty or to the Budget allocation for agricultural commodities. However, there will be some relief for the co-operative sector as the government has proposed to extend the deduction of profit and gains to primary co-operatives engaged in supply of cattle feed and cottonseed to, inter alia, a federal co-operative or government organisations. At present, such deductions are allowed to a primary co-operative society engaged in supplying milk, oilseeds, fruits, or vegetables raised or grown by its members to a federal co-operative society and others engaged in the same activities.

 

Further, the government has proposed to build mega textile parks, which might give some boost to the cotton sector as demand might increase. It can be considerd an indirect push to the cotton sector, although setting up of textile parks would increase demand not only for cotton but also for other fibres such as nylon. 

 

The National Fibre Scheme for self-reliance in natural fibres such as silk, wool, and jute, man-made fibres, and new-age fibres, Textile Expansion and Employment Scheme to modernise traditional clusters with capital support for machinery, technology upgradation and common testing and certification centres, a National Handloom and Handicraft programme to integrate and strengthen existing schemes and ensure targeted support for weavers and artisans are also some of the indirect support to the agricultural sector. 

 

The government has not changed the duty stuctures on agricultural commodities as it is cautious ahead of elections in several states. They did not want to take the risk of rising inflation. In general, the market is not happy with the Budget.

(Taniva Singha Roy)

  

 

GEM AND JEWELLERY DOMESTIC COUNCIL CHAIR RAJESH ROKDE

=====================================================

The Union Budget 2026–27 reflects a stable and sensitive approach towards the gems and jewellery industry. The absence of any increase in customs duty or GST (goods and services tax), continued policy certainty, strong MSME (micro, small, and medium enterprises) and cluster support, ease-of-doing-business measures, and litigation-reducing income-tax reforms, together provide confidence to the trade and reinforce the government's recognition of our sector as a key contributor to employment, exports, and economic growth.

(Shreya Shetty)
 

 

JIO CREDIT MD, CEO KUSAL ROY

=============================

The FM (finance minister) is to be congratulated for delivering a Budget that focuses on bolstering the SME (Small and Medium Enterprises) sector in particular, and manufacturing sector in general. There is a clear push to promote Make-in-India and derisking our economy from the impact of tariffs. 

 

The honourable finance minister has announced substantial incentives for seven critical manufacturing sectors including pharmaceuticals, semiconductors, rare-earths, chemicals, capital goods, tool-production, container manufacturing and the textile sector. In addition, rejuvenation of 200 legacy industrial clusters will also provide a strong fillip to industries. There will also be dedicated focus on developing infrastructure for cities with a population over 500,000, and creation of a fund pool of Rs. 5,000 crore (INR 50 billion) per city economic region. The FM has also taken steps to upgrade TREDS by providing credit guarantee support, a move that will enhance confidence for SMEs on TREDS (trade receivable discounting system).

 

Overall, from the point of view of the NBFC sector, I expect this progressive Budget to have a positive impact on credit demand from SMEs and manufacturing sectors. In addition, there will be substantial employment generation and infrastructure creation in the city economic regions, which will further encourage offtake in retail credit.

(Shumaila Firoz)

 

 

KOTAK MAHINDRA LIFE EXECUTIVE VICE-PRESIDENT BHATT

==================================================

The FY27 Union Budget highlighted the government's commitment towards fiscal consolidation while retaining its push towards capital spending which is expected to grow by 11.5% to INR 12.2 trillion. Fiscal deficit is pegged at 4.3% (against 4.4% in FY26). Net market borrowing is expected to finance slightly less than 70% of the fiscal deficit. However, bond markets were anticipating a lower gross borrowing by way of dated securities (INR 17.2 trillion as per budget). As a result, 10-year bond yield may open 4-5 bps higher on Monday. Focus may shift thereafter to the Reserve Bank of India policy outcome later in the week.

(Durgesh Nandan)

 

 

IGRAIN DIRECTOR RAHUL CHAUHAN

=============================

The government needs to place greater emphasis on India's agriculture sector by allocating higher resources to improve productivity and reduce dependence on supplies from other regions. Despite being a major producer, agricultural productivity in India remains among the lowest across most crops, with the exception of rice. Enhanced investment in irrigation, technology, research, and farmer support is essential to bridge this gap. At the same time, higher allocations to the National Oil Mission are necessary to boost domestic oilseed production, cut import dependence, and strengthen overall food and energy security.

(Udita S. Jaiswal)

 

 

CRISIL INTELLIGENCE SENIOR DIRECTOR PADMANABHAN

================================================

The finance minister's announcement of seven high-speed transport corridors is critical not just for capacity creation, but for enabling technology adoption through advanced signalling, traffic management and higher-spec rolling stock. These corridors will significantly reduce inter-city travel time and support seamless multimodal people movement by integrating rail, road, metro, bus and aviation networks. Given their long gestation, success will hinge on access to long-term financing and appropriately structured moratoriums.

(Durgesh Nandan)

 

 

KOTAK SECURITIES MD, CEO SHRIPAL SHAH

======================================

The steep increase in STT on futures and options, coming on top of the last year's hike, is likely to raise impact costs for traders, hedgers, and arbitrageurs. This could cool derivative activity and lead to a reduction in volumes. The intent appears to be volume moderation rather than revenue maximisation, as any potential revenue gain could be offset by lower derivative volumes.

(Shumaila Firoz)

 

SAMCO SECURITIES HEAD OF RESEARCH APURVA SHETH

==============================================

The capex target for FY26 has been set at Rs 12.2 lakh crore (INR 12.2 trillion). This is a significant jump from 11.1 lakh crore (INR 11.1 trillion) set for FY25. This translates to a jump of 9.9% over FY25. This is a positive for infrastructure development, which remains one of the key focus areas of the government.

(Durgesh)
 

 

FUND MANAGERS

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HDFC SECURITIES MD, CEO DHIRAJ RELLI

=====================================

While this Budget may not be characterised as transformative, it reflects the finance minister and her team's continued pragmatic approach to economic management. Today's market reaction stems primarily from the revised Securities Transaction Tax framework, which now applies 0.05% to futures contracts (up from 0.02%) and 0.15% to options, representing a measured intervention in the derivatives market. The immediate correction appears to be a knee-jerk response. I remain confident that investors should maintain their market participation, focusing strategically on sectors with strong earnings visibility rather than capital-intensive plays. What distinguishes this Budget is the finance minister's exceptional ability to calibrate policy across diverse sectors and segments. The devil truly lies in the details, and I encourage stakeholders to carefully examine the fine print. Therein lie numerous thoughtful provisions that will become apparent over time.

 

The cumulative effect of such well-considered government initiatives, combined with favourable economic trends, positions us well for sustainable growth and attractive investment returns through FY27. While the enhanced STT regime may create near-term headwinds for capital market participants, it reflects a long-term vision for market stability and maturity. This trade-off should ultimately benefit the broader financial ecosystem.

(Gopika Balasubramanium)

 

AXIS MUTUAL FUND CIO ASHISH GUPTA

=================================

This year's Budget is fairly conservative in its approach. The government has forecast a reduction in the fiscal deficit by assuming a nominal GDP growth of around 10% and tax growth of about 8%, indicating that its assumptions remain measured. Unlike last year, which saw a large stimulus for consumption and manufacturing through goods and services tax cuts, this Budget is more focused on providing stimulus to the services sector. There is also a clear emphasis on expected high-growth areas such as data centres, electronic manufacturing, and building future capacity through education and skilling, reinforcing the focus on self-reliance. Overall, it is a mixed bag for capital markets, with a stable tax regime being maintained, although increases in certain securities transaction tax and the borrowing programme may cause some disappointment.

(Janwee Prajapati)

 

 

KOTAK MAHINDRA AMC MD NILESH SHAH

==================================

This Budget has proposed a capital expenditure of Rs 12.10 lac crore (INR 12.1 trillion) which is more than the net market borrowing of Rs 11.70 lac crore (INR 11.7 trillion). I pray that a path is laid where one day capital expenditure will be more than the total borrowing, including small savings.

(Janwee Prajapati)

 

 

SHRIRAM AMC FIXED INCOME LEAD AMIT MODANI

=========================================

The government appears to be walking a fine line between driving growth and maintaining macroeconomic stability, gradually tapering support while safeguarding capital expenditure. Markets have welcomed this measured approach. Key highlights include a fiscal deficit target of 4.3% for FY27, signalling a credible path of consolidation, and a medium-term debt to GDP target of 50% by 2031, with FY27 debt to GDP expected at 55.6%. While gross borrowing at INR 17.2 trillion slightly exceeded estimates, largely due to INR 5.5 trillion in old debt repayments, net borrowing at INR 11.7 trillion keeps the trajectory stable. Market expects RBI liquidity support to keep bond yields in check. Overall, this budget balances growth-oriented spending with fiscal prudence, reflecting a strategy likely to sustain investor confidence and market stability."

(Shumaila Firoz)

 

 

GROWW MUTUAL FUND CEO VARUN GUPTA

=================================

The continued glide path on fiscal consolidation, with the deficit projected at 4.3% of GDP, reflects a clear commitment to balancing growth with long-term macro stability. Maintaining fiscal discipline while increasing devolution to states and sustaining capital expenditure is critical for keeping government debt on a declining trajectory. For investors, this predictability in fiscal policy helps anchor inflation expectations, interest rates and overall market confidence.

(Shumaila Firoz)        

 

UTI AMC SENIOR EXECUTIVE VICE PRESIDENT MITTAL

==============================================

Budget remains pro-growth and its focus to boost domestic manufacturing and build export resilient is positive. The Budget is marginally bond heavy mainly on supply: gross borrowing of INR 17.2 trillion is above market expectations of INR 16.5 trillion. The fiscal consolidation path looks broadly steady rather than meaningfully tighter, with FY27 debt-to-GDP guided at 55.6% versus the 55.2% street view. Near-term yields may see pressure, though demand remains supportive. We expect yield curve to remain steep. Moderate duration products like corporate bond funds or income plus arbitrage funds remain most attractive from risk reward perspective.

(Durgesh Nandan)

 

ANALYSTS

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MOODY'S RATINGS SENIOR VICE-PRESIDENT GUZMAN

============================================

The Union government's proposed Budget leaves India's sovereign credit profile largely unchanged. While the government continues to demonstrate its commitment to--and a lengthening track record of--fiscal consolidation, it has targeted a narrowing of the fiscal deficit by only 0.1 percentage points of GDP in fiscal year 2026-27, the smallest pace of reduction since India emerged from the pandemic. As such, the deficit remains wider than any of those incurred during the current government's first term in office.

In addition to the continued spending on infrastructure, the Budget provides tactical support for the economy against the backdrop of prevailing external uncertainties, including the unresolved issues around US tariffs, and despite the proven resilience of economic growth over the past year. At the same time, support for the economy, which includes measures announced in recent months such as GST (goods and services tax) rationalisation, will lead to an ongoing erosion of tax revenue as a share of GDP that will worsen debt affordability as measured by interest payments relative to revenue. Moreover, we do not expect significant progress on debt reduction, which supplants deficit consolidation as the anchor for fiscal policy, leaving our broader assessment of India's fiscal strength intact.

(Janwee Prajapati)

 

COMMODITY EXPERT, POLICY COMMENTATOR G CHANDRASHEKHAR

======================================================

First, the Budget is long on intent and short on strategy. Second, implementation is the key. Even if the intent is good, it is extraordinarily important to devise a strategy and monitor and evaluate the progress of the strategy. That is what our country lacks. Third, there were, in my view, opportunities to generate more revenue by raising customs duty, for example, on gold and silver. I think bullion should be taxed as a demerit commodity. And that will generate more revenue for the government. And if that were to reduce our imports, it would also stabilise the rupee. Bullion import is something which is actually destabilising the rupee and raising the fiscal deficit.

 

Another opportunity was to raise customs duty on edible oil. It was 20% previously, but in May 2025, the government reduced it to 10%. Consumers have not received any reason. Import duty on edible crude oil would have supported domestic oil seed prices. Farmers would have benefited if you continued to merely import large quantities of edible oil.

 

The Budget was below expectations. There are some very significant changes that the Budget could have proposed as far as strengthening agriculture is concerned. For example, stewardship for farmers in terms of input management and agronomy. The second one is technology infusion, and the third one was contract farming. The government should have encouraged contract farming and made corporates more responsible for producing their input.

(Shreya Shetty)

 
 

SAMCO SECURITIES RESEARCH ANALYST RAJ GAIKAR

=============================================

The Finance Minister's proposal to raise STT (securities transaction tax) on futures to 0.05% is structurally negative for the capital market ecosystem, particularly F&O-driven businesses. Higher transaction costs are likely to reduce trading volumes, dampen short-term momentum, and lower profitability for active market participants.

 

FII (foreign institutional investor) participation in derivatives may also moderate as post-tax trading efficiency declines, impacting overall liquidity. This can create a cascading effect on revenue streams of broking companies, exchanges, AMCs (asset management companies), and depositories, which are closely linked to market turnover. With derivatives volumes already shrinking in recent months, the hike may further pressure near-term earnings visibility. While fiscally supportive, the measure poses headwinds for capital-market-linked stocks.

(Shumaila Firoz)

 

SAMCO SECURITIES RESEARCH ANALYST MOUR

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The proposal announced by Finance Minister Nirmala Sitharaman to develop seven high-speed rail corridors, including key economic routes such as Mumbai–Pune, Pune–Hyderabad, Hyderabad–Bengaluru and Bengaluru–Chennai, represents a structural push toward decongested, high-capacity rail infrastructure. Dedicated high-speed corridors are likely to accelerate project execution, improve asset utilisation, and unlock large engineering, procurement, and construction order inflows across track laying, electrification, signalling and station development. This is materially positive for railway infrastructure players such as Rail Vikas Nigam Ltd. and IRCON International Ltd., while electrification and civil contractors like KEC International Ltd., NCC Ltd. and Ashoka Buildcon Ltd. should see sustained order momentum. Financing support from Indian Railway Finance Corp. further strengthens funding visibility for long-term rail expansion.

(Duregsh Nandan)

 

End

 

US$1 = 91.98 

 

Compiled by Shaheed Shaikh

Filed by Tanima Banerjee

 

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