What experts say on Budget: Steady state, long view

The Union Budget 2026-27 strikes a pragmatic approach between fiscal prudence and growth.

It reinforces the role of infrastructure as the primary engine for sustainable economic growth. The increase in capex outlay to ₹12.2 trillion, the proposal to commit ₹5,000 crore for new City Economic Regions, the creation of dedicated rail and freight corridors, and new waterways are all measures aimed at ensuring inclusive development.

The proposal to offer a tax holiday till 2047 to foreign companies providing cloud services globally using Indian data centres will provide a major boost to the country’s digital infrastructure, along with measures announced to harness the power of AI.

Equally important is the focus on building a resilient financial ecosystem. Setting up a high-level banking committee, and measures to deepen bond markets and diversify sources of long-term capital—including from Indians overseas and entities in IFSC through rationalised tax rates—will support the proposed creation of large-scale physical and digital assets.

Other significant steps include higher liquidity and equity support to MSMEs, and incentives for domestic consumption and exports through lower import duties on key input materials, which will enable mass employment generation and catalyze demand for financial services, including credit, insurance and investments.

(The author is MD & CEO, Jio Financial Services Ltd. Views are personal)

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Make for the long term: Deepak Shenoy

The budget takes a progressive stand on domestic manufacturing, with a strong push in key sectors such as semiconductors, high-precision equipment, solar and nuclear plants, data centres, and, importantly, the rare earth supply chain.

Additionally, the fiscal deficit numbers indicate a disciplined approach. The projected fiscal deficit for FY27 is 4.3% of GDP. It shows we aren't overspending and that, overall, subsidies remain under control.

Expenditure is increasingly being directed towards building assets, with a 9% (over the current year’s budget estimates) increase in capital expenditure, including higher allocations for defence.

A sustained focus on domestic manufacturing is critical for improving macroeconomic outcomes over the long term. Notably, defence is no longer the largest expenditure item after interest payments, with roads and transport emerging as the biggest area of spending instead.

The increase in STT (securities transaction tax), though, will likely reduce arbitrage fund returns and could hurt foreign portfolio investors. A change in the taxation of Sovereign Gold Bonds purchased in the secondary market is also a setback for investors.

Notably, most tax-related measures are likely to be addressed in the forthcoming Income Tax Bill rather than in the Union Budget itself.

(Deepak Shenoy, CEO & MD, Capitalmind Mutual Fund.)

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A statement on stability: Sonu Iyer

The Budget prioritizes predictability, simplicity, and ease of compliance, strengthening confidence amongst taxpayers and investors while keeping India firmly aligned with its medium-term growth objectives.

Unchanged income tax rates and slabs provide regime stability. The change in STT on futures and options to curb speculation and the move to tax buybacks as capital gains with an additional levy for promoters are welcome. The shift in buy-back taxation increases transparency and is likely to be welcomed by investors.

The increase in limits for foreign capital brought in by Persons Resident Outside India broadens India’s ownership base and strengthens long‑term participation in domestic equity markets. The introduction of Foreign Assets of Small Taxpayers – Disclosure Scheme 2026 (FAST‑DS) provides a practical compliance mechanism for regularizing small, inadvertent foreign‑asset omissions.

The Budget’s continued push to decriminalize minor tax offences reflects a maturing, trust‑based tax administration. The reduction in TCS (tax collected at source) offers direct cash‑flow relief to families.

Administrative simplification remains a strong theme, with redesigned, easier-to-use tax‑return forms (still to be notified) and the introduction of rule‑based automated access to zero or lower withholding tax certificates for individuals. Removal of the TAN requirement for resident buyers purchasing immovable property from non‑resident sellers brings long-needed parity with resident-to-resident transactions.

(Sonu Iyer, partner and national leader, people advisory services, Tax, EY India)

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Three cheers for education: Anurag Behar

The education section of the budget has just three good points. First, setting up five ‘university townships’ near industrial corridors—sort of concentrated hubs of education and research—is good because network effects of physical proximity are well known. Second, hostels for girls in all districts is a crying need. Third, investment into telescope facilities is excellent, because fundamental research is an ignored necessity.

But education initiatives, including skills and research, is not limited to a particular section. It is interwoven through other initiatives in the budget such as in announcements relating to the care ecosystem, animal husbandry, design, orange economy, and health. Almost all proposals are backed up by relevant educational imagination and commitments. Too often this is what is missed and therefore new initiatives stall in the absence of adequate human capacity.

Nevertheless, the budget is likely to feel tepid on education. We must not be bothered about that. The real energy for change in education is the National Education Policy 2020. The HRD ministry has taken several crucial steps for its implementation. The introduction of the Higher Education Commission of India Bill in Parliament is another giant step. The government and society must remain focused on the implementation of the letter and the spirit of NEP 2020.

(Anurag Behar is CEO of Azim Premji Foundation)

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A backbone for growth: Nilachal Mishra

What stands out in Budget 2026-27 is not just the size of the infrastructure spend, but how it is being used to support trade and manufacturing. The ₹12.2 trillion capex is being channelled into freight corridors, waterways, industrial parks, and urban growth engine areas that directly reduce logistics friction and improve competitiveness.

This Budget marks a shift from building assets to building demand and supply in markets. Investments in freight corridors, coastal shipping, and multimodal logistics are aimed at lowering logistics costs, while high-speed rail and aviation connectivity support the movement of people, tourism, and services.

At the same time, the focus on rare earth corridors and critical mineral supply chains signals a more strategic approach to infrastructure, supporting advanced manufacturing, electronics, clean energy and defence.

The focus on Tier-II and Tier-III cities through City Economic Regions shows that urban growth is no longer metro-centric. By linking funding to reforms and performance, the government is pushing cities to strengthen governance, planning and delivery, rather than just absorbing capital.

Equally important is how the budget tries to improve private sector trust and confidence through the new Infrastructure Risk Guarantee Fund. Along with faster asset recycling through REITs, the budget shows clear intent to crowd in private capital and make projects bankable.

(Nilachal Mishra is partner and head, government & public services, national leader - government and infrastructure, KPMG in India)

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A renewable energy boost: Bhupinder S Bhalla

Budget 2026-27 has laid strong emphasis on developing India’s renewable energy sector. It has proposed restructuring of two key power sector lenders, PFC Ltd and REC Ltd, to achieve scale and efficiency in the money lent to the renewables sector.

On the taxation side, it spelt out a stimulus to bring down the cost of battery storage systems, which is crucial to hastening the pace of adoption of large-scale renewables in the country. Manufacturers will no longer have to pay the basic customs duty (BCD) on capital goods used to produce lithium-iron cells for the batteries.

Solar panels will also get cheaper since imported sodium antimonate used in its manufacture will be exempt from BCD (as against the existing 7.5% BCD).

The government has also eliminated central excise duty payable on the entire value of production of biogas that is blended with CNG, a low-carbon transportation fuel. This will make biogas production more attractive.

To promote renewables adoption at the consumer end, the government has raised the allocation for two key solar programs, one to promote roof top solar installation on houses, PM Surya Ghar Muft Bijli Yojana, and the one for farms, PM KUSUM.

The Budget for 2025-26 had announced a National Manufacturing Mission which includes the cleantech sector with a modest outlay of ₹100 crore.

(Bhupinder S. Bhalla is former secretary, ministry of new & renewable energy)

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Impact at scale: Puneet Chandok

The Budget marks a decisive step in India’s journey toward intelligence-driven governance. By prioritising artificial intelligence (AI) and digital infrastructure across healthcare, agriculture, education, and citizen services, the government is laying the foundation for a more responsive, transparent, and outcomes-focused administration that can deliver real impact at scale. AI is fast becoming integral across sectors and this Budget creates an opportunity for industry and government to work together to move India from Digital Public Infrastructure to AI Public Infrastructure, ensuring innovation is built at scale, securely, and responsibly.

The proposed ‘education to employment and enterprise’ standing committee will add institutional depth, connecting learning, workforce readiness, and enterprise creation, which is essential as India scales its role in global services. This integration between technology, talent, and governance reflects a forward-looking approach to building India’s AI and digital economy.

A landmark reform, the long-term tax holiday for data centres and cloud service providers until 2047, will accelerate the growth of sovereign-ready cloud and AI capacity, strengthening the backbone of India’s economic resilience and global competitiveness. Recognising AI and cloud infrastructure as strategic national assets reflects clear prioritisation for technology-led growth.

(Puneet Chandok is president, Microsoft India & South Asia)

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A pragmatic approach: Saugata Gupta

The Budget adopts a pragmatic approach focused on strengthening long-term economic fundamentals while reinforcing confidence across households and industry. By prioritising fiscal discipline and structural reforms, it lays a stable macroeconomic foundation that is critical for sustained consumer confidence.

The commitment to fiscal prudence and consolidation, reflected in a calibrated fiscal deficit path, enhances economic stability and predictability–key enablers of durable consumption growth. On the household front, the budget emphasizes tax certainty and ease of living, with no changes to income tax rates and a continued push towards simpler, trust-based compliance through extended timelines, rationalised fees and decriminalisation of select tax provisions.

These measures reduce friction for individuals and small businesses while improving compliance efficiency.

From a long-term growth perspective, the Budget plays to India’s strengths by supporting manufacturing-led expansion, particularly in labour-intensive and legacy sectors, alongside newer engines such as electronics manufacturing, data centres and services. This focus supports job creation, income stability and demand resilience. Measures to improve regulatory clarity and market discipline further strengthen the overall business environment, benefiting MSMEs and domestic value chains.

(Saugata Gupta is MD and CEO, Marico Ltd.)

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Blueprint for a virtuous cycle: Sabina Dewan

Amid significant global economic uncertainty, the 2026-27 budget prioritizes people-centric development. This reflects an understanding that job creation and entrepreneurship can create a virtuous circle—when people earn, consumption rises. This generates new markets that attract trade and investment, ultimately spurring economic growth. This is a welcome departure from the usual top-down growth-first, jobs-later narrative.

The budget also presents skills development as a central solution to an ailing labour market. The focus on textiles, tourism, health and care services offers an opportunity for significant job creation. But harnessing the employment potential of these sectors requires a lot more than skills development. These sectors have been plagued by several deficits for years—inadequate energy and physical infrastructure is one; insufficient investment in labour productivity the other.

Sustained increases in labour productivity are the foundation for lasting per capita income growth that is required for development and poverty reduction. Labour productivity extends beyond investments in skills training to include social security, labour protections, and effective pathways from education and training into employment.

The budget is well-placed in its priorities, but implementation is key. Harnessing India’s economic potential hinges on building a wider ecosystem that supports labour productivity extending well beyond skills training.

(Sabina Dewan is founder and executive director, JustJobs Network)

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What explains the market’s fall?: Anand Rathi

The sharp market correction following the budget appears less a verdict on its quality and more a clash between expectations and intent. Equity markets had priced in some form of consumption stimulus, tax relief, or sector-specific sweeteners. The absence of these triggered a swift repricing, particularly in segments that had benefited most from the earlier phase of fiscal expansion. In addition, the clear signalling of fiscal consolidation, slower growth in public capex, and a tolerance for near-term pain in favour of long-term efficiency unsettled momentum-driven trades.

The increase in the securities transaction tax (STT) was avoidable, as it sends the wrong signal to capital markets; however, its overall impact on market dynamics is likely to be marginal.

The correction may prove constructive rather than concerning. A budget that prioritizes macro stability, predictable policy, and institutional strength over short-term boosts is ultimately supportive of valuations, earnings visibility, and capital inflows. The markets may remain volatile in the near term as expectations reset but the medium-term backdrop favours a shift from speculative exuberance to more fundamentally grounded growth.

(Anand Rathi is founder & chairman, Anand Rathi Group)

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Makhana out, coconut in: Himanshu

This budget came in the backdrop of an agricultural economy suffering from lower price realisations, declining profits, and a long-term slowdown in rural wages and incomes for majority of farmers. Thus, budget expectations were a clear strategy to raise incomes for farmers, wage workers, and the revival of the non-farm sector.

Indeed, the finance minister reiterated these as the three ‘kartavya’, but it turned out to be rhetoric. Budgeted expenditure on agriculture for 2026-27 is almost the same as the actual expenditure two years ago in nominal terms and a sharp decline in real terms.

This year’s focus has been on plantation crops given the political considerations of elections in Kerala, Tamil Nadu, and Puducherry. While makhana was in flavour last year, it is coconut and other coastal plantation crops this year. Unfortunately, the much-touted focus on coconut has not materialized into higher budgetary allocations despite the export potential of plantation crops. Similarly, the focus on livestock and fisheries was much needed but failed to see any significant budgetary allocations. Cereals that account for what majority farmers work upon has seen a decline in all the major schemes.

(Himanshu is associate professor, Centre for Economic Studies and Planning, School of Social Sciences, Jawaharlal Nehru University)