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"Consistency is the Latest Gift a budget can give." Especially when volatility has become the norm.
With Budget 2026 just weeks away, every investor — retail, HNI, global, and domestic — is reading between the lines.
And now that the stopwatch has already begun, here's what our PMS managers expect from Budget 2026 and what it could mean for growth, sectors, and long-term portfolios.
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Before we jump into Budget 2026 expectations, it is equally important to know how the Indian economy has performed in the last fiscal year and what we can expect in different sectors and areas.
To give a rewind of 2025, many geopolitical and monetary events happened during this course. From ₹12 lakhs direct tax extension to an increase in LTCG points (to 12.5%), neighboring border tension, FIIs outflows to US's tariff hikes, and GST 2.0 reform, to Trump's uncertain moves, India has seen a wave of events impacting the market.
And at this stage, the NIFTY and Sensex indices also delivered low single-digit returns, marked by sharp rallies and corrections instead of a steady trend. While foreign investor flows turned cautious at times, strong domestic participation helped prevent deeper drawdowns.
Considering the conditions that defined 2025, markets now enter Budget 2026 with a focus on stability, earnings visibility, and policy continuity — setting the context for what investors and PMS fund managers are watching next.
Going by recent trends, expectations from the Union Budget 2026 suggest “Continuity rather than Big Policy Surprises.” In simple terms, the government seems focused on staying steady amid global uncertainty (from geopolitical tensions to volatile interest rates), rather than making aggressive changes.
Neeraj Gaurh, Director & AIF Fund Manager at Anand Rathi, believes that stability in direct tax policies has been reassuring for investors. "With the rebate extended up to ₹12 lakh, we are unlikely to see major changes on the direct tax front," he says.
From a broader economic point of view, Budget 2026 is expected to support:
On the fiscal side, Gaurh expects measured spending on infrastructure, rather than an aggressive push. A balanced fiscal approach, he notes, would be healthier for the economy in the long run—allowing growth without putting pressure on government finances.
Now comes the part where major speculation happens. Considering the ongoing Budget 2026 news and what events happened in 2025, here's what our fund managers expect in terms of sector focus.
While Budget 2025 focused on domestic manufacturing, green energy, and Atmanirbhar "Make in India" schemes, for the 2026 Budget, we can expect focus on:
To the most talked-about gossip of any budget, tax rules is a genre everyone looks forward to. It remains a closely watched area for investors, though expectations this year are modest.
Last year, we saw a major relief in direct tax for the public, and a reverse effect was visible in STCG and LTCG rules.
Summing up investor sentiment, Neeraj Gaurh says, "Hearing No Negative News is also Good News." And likely, if the long-term capital gains tax (LTCG) drops back to 10% or lower, long-term investors will be in a happy mood.
Overall, tax stability is seen as positive, and investors may expect no major reform for this Budget.
For investors, the Union Budget is more than an annual event. It gives a clear indication of the government's economic priorities for the year ahead. More precisely, "It sets the tone for economic priorities over the medium term."
Beyond headline numbers, investors should watch,
Markets typically react to Budgets in the short term, but PMS managers focus on what it means for FY26–FY27 earnings visibility.
Based on expectations:
Rather than knee-jerk reactions, equity markets are likely to reward policy consistency and earnings visibility. For long-term prospects, this environment could favor a positive reaction from the investors.
As soon as the 2026 Budget gets announced, a wave of reactions will splutter in the market, impacting the stock markets.
But, what investors mostly ignore is people's reaction for the rest. While markets are uncertain, volatility will never escape — be it global events, geopolitical issues, or an oil crisis. Volatility, fund managers say, should be viewed as an opportunity rather than a risk.
"If we remain focused on the domestic growth story and look beyond short-term global noise, volatility becomes an ally," says Neeraj Gaurh. Money should not be permanently parked in fear.
Acceptance and belief in the recovery are what can soothe the market.
(Disclaimer: This article is for informational and educational purposes only. It may include opinions and views expressed by individuals, which are personal and do not constitute financial advice. Any figures, calculations, or projections are illustrative and should not be taken as predictions or recommendations. Actual results may vary. Readers are encouraged to carefully read official scheme or product documents and consult a certified financial advisor before making any investment decisions. Neither the author nor the publication can be held responsible for any loss or liability arising from the use of this information.)
