New Delhi kept growth at the centre of policy. Capital expenditure rises to a record ₹12.2 lakh crore, even as the fiscal deficit target nudges down to 4.3% of GDP. Borrowing needs hit ₹17.2 trillion, which keeps bond markets on edge. The government also raised transaction taxes on derivatives and tweaked buyback taxation, moves that affect market-linked businesses. Together, these choices shape a clear sector map of gains and pain.
Big money to build: infrastructure, rail and roads pull ahead
Capex stays the star. Ratings analysts note roads and railways take nearly half of the proposed outlay. States also get larger interest-free loans for projects. Expect steady order books for EPC players, cement, steel, construction equipment and logistics. Railways alone secure a sizeable capital push that sustains multi-year demand visibility for wagons, track works and signaling. In budget terms, “capex” means spending to create long-lived assets like highways or stations; it tends to have stronger growth effects than routine expenses.
Manufacturing’s moment: electronics, components and rare earths
Policy aims to lift domestic manufacturing and jobs. Higher outlays and facilitation for electronics components, plus a rare-earths push, signal support for supply chains tied to EVs, defence and clean energy. Firms in speciality materials, advanced components and assembly could benefit from procurement and cluster development. The thrust is pro-industry, but depends on execution capacity in states and quicker clearances.
Clean energy and mobility: selective tailwinds
The budget narrative stays aligned with the energy transition. Media and official signals point to lower duties on select solar and storage inputs and a stronger materials base for EVs through rare-earth corridors. Grid, storage and transmission projects should also ride the capex wave. That said, developers still watch policy delivery on tenders and tariffs.
Skills and content economy: AVGC gets a lift
Animation, VFX, gaming and comics (AVGC) find a place in the spotlight. Support for content labs in schools and colleges and a national hub in Mumbai aim to deepen the talent pipeline. Studios, ed-tech providers and tools vendors gain from formal skilling and industry links. A “hub-and-spoke” model means one anchor institution supports many partner centres across regions.
Rural engines: dairying, animal husbandry and allied activities
Dairy and livestock receive higher allocations and scheme support, including entrepreneurship and value-chain measures. Cooperatives may benefit from tax reliefs at the margin. Equipment suppliers, feed makers and cold-chain firms stand to gain as volumes and compliance standards rise. These steps tie rural livelihoods to formal markets and cleaner energy uses like Bio-CNG.
Financial market fallout: brokers, traders and buyback-heavy firms feel the pinch
The hike in securities transaction tax (STT) on futures and options raises trading costs. Higher frictions usually cut volumes and lower turnover-linked revenues for brokers, exchanges and depositories. The budget also shifts buyback taxation to capital-gains treatment with extra levies for large holders, which could reduce buyback appeal as a capital-return tool. In plain terms, STT is a levy on every trade; even a small rate change hits high-frequency activity.
Exporters and logistics: reforms help, rates and demand still matter
Commerce officials flagged measures to improve logistics efficiency and update SEZ rules. These steps, alongside transport capex, should aid shipment reliability and lower costs for manufacturers. Export momentum, however, will still hinge on global demand and currency conditions.
Subsidies and consumers: steady, not splashy
Total spending rises at a controlled pace, with food and fuel subsidies slightly lower than last year. The message is continuity, not stimulus. Consumer-facing firms get no broad tax windfall, so demand levers rest on jobs, rural cash flows and credit availability rather than direct giveaways.
The scoreboard: who wins, who loses
Likely winners:
Infrastructure EPCs; cement and steel; rail suppliers; capital goods; logistics; electronics components and advanced materials; AVGC and skilling ecosystems; dairy and allied rural value chains; grid and storage project developers.
Likely losers or near-term laggards:
Brokerages, exchanges and high-frequency traders (due to higher STT and cooler derivatives volumes); companies relying on frequent buybacks; levered traders facing lower post-tax returns. Bond-sensitive lenders could also face mark-to-market swings if yields stay firm on heavy borrowing.
Why it matters now
Capex-led growth continues, but with tighter revenue leeway and record borrowing. For investors, the budget tilts portfolios toward build-out themes and local supply chains while tempering speculative market activity. Execution—awards, clearances, and state capacity—will decide how much of the paper gains turn into orders, cash flows and jobs over FY27.
In short, Union Budget 2026–27 favours assets over allowances. Builders, makers and rural value chains get the push; market-linked intermediation absorbs the nudge. The coming auction calendars, project pipelines and tax fine print will set the final pace.