Budget 2026 Boosts Infrastructure, MSMEs & NRI Investments

Mr. Umesh Revankar, Executive Vice Chairman, Shriram Finance

“The Budget clearly signals continuity of intent on infrastructure and logistics, even if headline capex has not increased sharply. By reiterating the importance of infrastructure, logistics and river-linked transport, it strengthens India’s ability to move goods efficiently and connect manufacturers to coastal and international markets. Over time, this should help ease bottlenecks, lower logistics costs and expand market access for Indian industry. I am also encouraged by the emphasis on MSMEs and emerging indigenous sectors such as biopharma and food processing. India is a large food producer with the capacity to meet domestic demand while also serving global markets. With the right policy support, this focus can translate into stronger rural incomes and more resilient MSMEs. On the funding side, while NBFCs already access international markets through bonds and syndicated loans, monetary transmission in India has traditionally been gradual. Rate cuts may not translate immediately, but a deeper and more efficient corporate bond market can, over time, meaningfully widen access to capital for industry.”

Mr. Aditya Mulki, CEO, Navi AMC Ltd

“Overall the budget has prioritized all the right initiatives from fiscal responsibility, continued capital expenditure to a rare earth corridor and the market reaction is much more of a knee jerk reaction in our view to the increase in STT on futures and no decrease in capital gains tax. NRI and PROI (Persons resident outside India) limits increased to 10% of the paid-up capital of an Indian listed company (previously 5%). The combined cap for all such individual investors in a single company has been raised to 24% (previously 10%). This is a move in the right direction and to an extent expected to negate the impact of FII outflows which has led to the rupee deteriorating sharply against the USD. Unlike institutional FPIs, which often “exit” en masse during global shocks, NRIs tend to have a longer-term investment horizon and could act as a cushion to FII outflows. The government fulfilled its commitment made in 2021–22 to reduce the fiscal deficit below 4.5% of GDP by 2025–26. The fiscal deficit for 2025–26 is estimated at 4.4% of GDP. For 2026–27, the fiscal deficit is expected to further decline to 4.3% of GDP. Impact This signals a transition to long term fiscal stability. Lowering the fiscal deficit while maintaining its infrastructure push will help in driving GDP growth. This also makes the country attractive for FPI investments as it signals fiscal responsibility and long tern currency stability. In very short “the budget is a structurally responsible one and not one on rhetoric. In the long run this should be structurally positive for equities, and we are not too worried about the short term reaction”.