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What is the story about?
The most striking takeaway from the market discussion on the Budget 2026 was the clear pivot in India’s growth narrative — away from a rural-led framework towards manufacturing, services and digital infrastructure as the primary engines of the economy.
As Pankaj Tibrewal, Founder and Chief Investment Officer of IKIGAI Asset Manager, put it bluntly while decoding the speech, the message this year was “manufacturing, manufacturing, manufacturing”.
Tibrewal said the early part of previous Budgets was dominated by rural and farm issues, but this time the emphasis had clearly shifted to what he described as the real economy, with repeated references to manufacturing, artificial intelligence, data centres and new-age technologies. He argued that this change in tone itself reflects a structural shift in policy priorities towards productivity, industrial capacity and long-term competitiveness.
Building on that pivot, Vikas Khemani, Founder of Carnelian Asset Management, said the manufacturing push in the Budget is broad and operational rather than symbolic.
He pointed out that electronics manufacturing services, textiles and semiconductors have all been addressed, and that this comes in the context of India’s expanding network of free trade agreements, which strengthens the export and supply-chain opportunity for these sectors.
Public capital expenditure remains the second major pillar supporting this shift. Khemani highlighted that higher allocations to defence, railways and roads reinforce the government’s commitment to infrastructure-led growth and continue to provide a strong base for private investment participation across the industrial ecosystem.
Also Read | Budget 2026: Borrowing looks high now, but could ease later, says Sajjid Chinoy
Alongside manufacturing, the panel agreed that services and digital infrastructure form the other long-term structural leg of the Budget. N Jayakumar, Group Chief Executive Officer and Managing Director of Prime Securities, said he is particularly constructive on the creation of a national digital highway, covering data centres and telecom infrastructure, supported by incentives that encourage investments over a multi-decade horizon.
He also pointed to the importance of the services push — including medical tourism and tourism — as part of a roadmap to build globally competitive services capabilities rather than merely domestic capacity.
From a market standpoint, however, the immediate debate was dominated by the increase in securities transaction tax on futures and options. Tibrewal said the sharp reaction in equities had more to do with timing than with the size of the measure, estimating that the change could raise about ₹20,000–25,000 crore at a point when both global and domestic sentiment remain fragile, and Indian markets have underperformed. He expects some near-term impact on volumes and speculative activity but believes history suggests markets typically adjust over a few months.
Importantly, Tibrewal also stressed that fears of adverse tax changes did not materialise. With no increase in long-term or short-term capital gains tax, he described the overall approach as pragmatic and summed up investor relief by saying, “No bad news is good news”.
Also Read | Budget 2026 positions India as a global services hub, says NITI Aayog’s Subrahmanyam
A more persistent concern raised by the panel was the continued coexistence of both capital gains tax and securities transaction tax. Rahul Jain, President and Head at Nuvama Wealth, and Jayakumar both said this remains a long-standing friction point for market participants. Jayakumar added that if higher STT is intended to act as a behavioural deterrent rather than simply a revenue tool, the policy design should rely more on structural levers such as contract sizes and participation thresholds, instead of repeated rate increases.
Despite this, Jayakumar said the broader policy message is one of continuity and long-term execution, with several “pilots” now in place that can be built upon over time. He also stated that domestic liquidity support continues through monetary operations, while the government’s fiscal push provides a parallel stabilising force.
When it comes to actionable positioning, Jain said investors should look most closely at manufacturing and infrastructure beneficiaries, echoing the broader policy thrust. He also highlighted pharma and hospitals, driven by the medical tourism push, as well as real estate and power-related segments that support data centres and digital infrastructure. At the same time, Jain cautioned that defence could see relative underperformance, as expectations from the Budget had run ahead of actual allocations.
For the entire discussion, watch the accompanying video
Also, catch the latest Budget 2026 updates here
As Pankaj Tibrewal, Founder and Chief Investment Officer of IKIGAI Asset Manager, put it bluntly while decoding the speech, the message this year was “manufacturing, manufacturing, manufacturing”.
Tibrewal said the early part of previous Budgets was dominated by rural and farm issues, but this time the emphasis had clearly shifted to what he described as the real economy, with repeated references to manufacturing, artificial intelligence, data centres and new-age technologies. He argued that this change in tone itself reflects a structural shift in policy priorities towards productivity, industrial capacity and long-term competitiveness.
Building on that pivot, Vikas Khemani, Founder of Carnelian Asset Management, said the manufacturing push in the Budget is broad and operational rather than symbolic.
He pointed out that electronics manufacturing services, textiles and semiconductors have all been addressed, and that this comes in the context of India’s expanding network of free trade agreements, which strengthens the export and supply-chain opportunity for these sectors.
Public capital expenditure remains the second major pillar supporting this shift. Khemani highlighted that higher allocations to defence, railways and roads reinforce the government’s commitment to infrastructure-led growth and continue to provide a strong base for private investment participation across the industrial ecosystem.
Also Read | Budget 2026: Borrowing looks high now, but could ease later, says Sajjid Chinoy
Alongside manufacturing, the panel agreed that services and digital infrastructure form the other long-term structural leg of the Budget. N Jayakumar, Group Chief Executive Officer and Managing Director of Prime Securities, said he is particularly constructive on the creation of a national digital highway, covering data centres and telecom infrastructure, supported by incentives that encourage investments over a multi-decade horizon.
He also pointed to the importance of the services push — including medical tourism and tourism — as part of a roadmap to build globally competitive services capabilities rather than merely domestic capacity.
From a market standpoint, however, the immediate debate was dominated by the increase in securities transaction tax on futures and options. Tibrewal said the sharp reaction in equities had more to do with timing than with the size of the measure, estimating that the change could raise about ₹20,000–25,000 crore at a point when both global and domestic sentiment remain fragile, and Indian markets have underperformed. He expects some near-term impact on volumes and speculative activity but believes history suggests markets typically adjust over a few months.
Importantly, Tibrewal also stressed that fears of adverse tax changes did not materialise. With no increase in long-term or short-term capital gains tax, he described the overall approach as pragmatic and summed up investor relief by saying, “No bad news is good news”.
Also Read | Budget 2026 positions India as a global services hub, says NITI Aayog’s Subrahmanyam
A more persistent concern raised by the panel was the continued coexistence of both capital gains tax and securities transaction tax. Rahul Jain, President and Head at Nuvama Wealth, and Jayakumar both said this remains a long-standing friction point for market participants. Jayakumar added that if higher STT is intended to act as a behavioural deterrent rather than simply a revenue tool, the policy design should rely more on structural levers such as contract sizes and participation thresholds, instead of repeated rate increases.
Despite this, Jayakumar said the broader policy message is one of continuity and long-term execution, with several “pilots” now in place that can be built upon over time. He also stated that domestic liquidity support continues through monetary operations, while the government’s fiscal push provides a parallel stabilising force.
When it comes to actionable positioning, Jain said investors should look most closely at manufacturing and infrastructure beneficiaries, echoing the broader policy thrust. He also highlighted pharma and hospitals, driven by the medical tourism push, as well as real estate and power-related segments that support data centres and digital infrastructure. At the same time, Jain cautioned that defence could see relative underperformance, as expectations from the Budget had run ahead of actual allocations.
For the entire discussion, watch the accompanying video
Also, catch the latest Budget 2026 updates here
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