Fiscal hawks and growth advocates alike will watch the 2026 Union Budget closely, with a new smallcase report forecasting heavy emphasis on defense and infrastructure under a disciplined spending framework. Thursday’s findings from 50-plus fund managers spotlight these sectors as capex magnets.
Forty percent flag defense for top funding, driven by production ramps, tech upgrades, export horizons, and perennial investments. Infrastructure at 29% promises roads, rails, and beyond, cementing India’s infrastructure-led boom.
Optimism permeates markets, with 82% projecting Nifty beyond 25,000 by FY27 close and 43% in the 25k-27.5k band. Inflation stays tame per 85%, under 5%. PLI-backed manufacturing (18%) shines, alongside modest nods to consumption and agriculture (7%).
Volatility looms for 80% near budget day—policy shocks, global ripples—but fades quickly. Corporates face tax stasis; salaried class eyes tweaks for relief.
Selective urban-rural demand measures via capex incentives, sans splurges, will safeguard fiscal integrity, sustaining the bullish equity narrative.