As India eyes robust economic momentum, the upcoming 2026 Budget is expected to double down on capital expenditure in strategic areas, led by defense and infrastructure. Smallcase’s latest report, drawing from 50+ investment managers surveyed pre-budget, underscores this shift while emphasizing fiscal restraint.
Defense leads with 40% backing, fueled by needs for self-reliance in arms manufacturing, force modernization, rising exports, and consistent funding. Infra claims 29%, promising transformative spends on transport corridors and logistics to anchor decades of prosperity.
Equity markets evoke positivity: 82% bet on Nifty 50 topping 25,000 by FY27, 43% within 25k-27.5k. Over 85% dismiss inflation fears, expecting sub-5% levels. Manufacturing (18%) benefits from PLI extensions, while consumption and farming (7% each) get pinpointed aid.
Eighty percent brace for peri-budget volatility from policy pivots and geopolitics, but view it as transient. Tax landscape stays steady for firms; individuals may see slab simplifications or rebates.
By focusing on demand revival through capex-linked incentives and compliance, without fiscal profligacy, the government aims to nurture a resilient economy, bolstering long-term investor faith.