New Delhi is bracing for a Union Budget 2026 that promises to channel massive capital expenditure into key growth engines, with defense emerging as the top beneficiary. According to a fresh report from investment platform smallcase, released on Thursday, the government is set to maintain fiscal discipline while ramping up investments in high-impact sectors.
The survey, involving over 50 investment managers, reveals that nearly 40% anticipate the highest allocations for defense. This push aligns with India’s drive to bolster domestic production, modernize its armed forces, tap into export potentials, and sustain ongoing expenditures in this vital domain.
Infrastructure secures the second spot, with 29% of respondents expecting significant outlays for roads, railways, and other foundational projects. These investments are viewed as critical for fueling long-term economic expansion, creating jobs, and enhancing connectivity across the nation.
Market sentiment remains upbeat. Over 82% of fund managers predict the Nifty 50 will surpass 25,000 by the end of FY 2027, with 43% eyeing a range between 25,000 and 27,500. Inflation concerns are minimal, as 85% foresee rates staying below 5% through FY 2027.
Manufacturing is poised for gains too, backed by 18% of experts, thanks to persistent Production-Linked Incentive schemes. Consumption and agriculture may see targeted support from 7% each, signaling measured interventions rather than blanket stimulus.
Budget volatility is expected by 80% around announcement time, driven by policy surprises and global cues, but most believe markets will swiftly rebound. Tax reforms appear unlikely for corporates, though salaried individuals might get minor relief or simplified slabs.
Overall, the report paints a picture of prudent spending to spur urban and rural demand without compromising fiscal health, setting the stage for sustained market optimism.