NewKerala.com

Budget 2026-27: A Pragmatic Capex Push for Defence, Tech & Exports

The Union Budget 2026-27 has been described in a Jefferies India report as a pragmatic exercise with no fireworks, focusing on stable medium-term growth rather than immediate market catalysts. It emphasizes significant capital expenditure, particularly in defence and infrastructure, while supporting data centres and electronics manufacturing. The report notes the budget's alignment with long-term export competitiveness but flags potential pressure from higher bond yields and an increased securities transaction tax. Sectors like cement, defence, electronics, and select realty and digital payments firms are seen as beneficiaries.

Key Points: Budget 2026-27: Pragmatic Capex Focus, Defence & Tech Boost

  • Capex focus on defence & infra
  • Boost for tech manufacturing & PLI
  • Long-term export competitiveness strategy
  • Higher STT may impact capital markets
  • Positive for cement, defence, electronics stocks
2 min read

'Pragmatic' Budget with capex focus, zero 'fireworks': Report

Jefferies report calls Union Budget 2026-27 pragmatic, highlighting capex focus on defence, tech manufacturing, and long-term export competitiveness.

"pragmatic approach with no fireworks - Jefferies India Report"

New Delhi, Feb 2

Union Budget 2026‑27 marked a "pragmatic approach" with "no fireworks," laying the groundwork for a stable medium‑term growth environment, without focusing on immediate catalysts for equity markets, a report has said.

Global Brokerage Jefferies India in the report lauded the renewed emphasis on capital expenditure, particularly in defence, which was enabled by slower fiscal consolidation.

The brokerage also welcomed support for data centres and electronics component manufacturing as evidence of the government's commitment to strengthen the domestic technology and manufacturing ecosystem.

Further, it said the government's strategy is clearly aligned with long‑term export competitiveness, with export boost remaining the focus

Jefferies flagged the higher bond yields as a factor that could weigh on rate‑sensitive sectors. According to the brokerage, the increase in securities transaction tax (STT) signalled the government's discomfort with elevated derivatives trading volumes, however adding that the outcome could negatively impact capital‑markets stocks and brokerage companies.

The report said the Budget is positive for cement and defence firms because of higher infrastructure capex, and for electronics manufacturers to gain from higher allocations under the electronic manufacturing production linked incentive (PLI) scheme. It also noted potential gains for select realty and digital‑payments stocks due to a data centre-related trigger and incentives for digital payments in the Budget.

The report also highlighted a "large disinvestment budget" adding that the planned divestment of IDBI Bank could be completed in FY27.

Finance Minister Nirmala Sitharaman presented the Budget 2026-27 with total budgeted expenditure at Rs 53.47 lakh crore, with the fiscal deficit targeted at 4.3 per cent of GDP, an improvement from the 4.4 per cent revised estimate for 2025-26.

Capital expenditure rose by 9 per cent to reach Rs 12.2 lakh crore in 2026-27, marking one of the largest such allocations in recent times and equating to 4.4 per cent of GDP.

Among the biggest increases, defence secured Rs 7.85 lakh crore overall, of which Rs 2.31 lakh crore goes towards capital spending.

- IANS

Share this article:

Reader Comments

P
Priya S
Good focus on electronics manufacturing and data centres. We need to become a global hub, not just an assembly line. The PLI boost is welcome. But I hope the benefits trickle down to smaller MSMEs in the component supply chain, not just the big players.
R
Rohit P
The STT increase is a bit of a dampener for retail traders like me. I understand the need to curb excessive speculation, but it feels like a direct hit on the common investor trying to grow capital. Could have been more balanced.
S
Sarah B
As someone working in tech, the data centre push is exciting. It's crucial for digital sovereignty and creating high-skilled jobs. The budget seems to be playing the long game on tech infrastructure, which is smart.
V
Vikram M
Defence getting over 7.8 lakh crore is massive! Atmanirbharta in defence is non-negotiable for a nation like India. This spending will boost our strategic autonomy and create a strong domestic industry. Jai Hind!
K
Karthik V
Pragmatic is the right word. No big populist announcements before elections, just steady focus on capital formation. Fiscal deficit target of 4.3% is a responsible move. Hope the IDBI disinvestment finally happens this time.
M
Meera

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50