“Given the above, this is a reasonable opportunity to invest in the coming months,” Jain said, adding that long-term return expectations should be realistic at a CAGR of around 12%, largely in line with nominal GDP growth and corporate earnings expansion.Jain said markets had headed into the Budget with high expectations, especially after prolonged weakness and heavy selling by foreign institutional investors ahead of the announcement. Rather than respond to short-term market pressures, the government has chosen to remain focused on longer-term growth and stability. “Taxes and regulations should not be adjusted to address small, short-term situations. Instead, taxes and policies should be stable, encourage growth and investment, fair and easy to administer,” he said.
He said specific measures such as increasing the tax on securities transactions on derivatives could help curb excessive speculation, while changes to the tax on buybacks were positive in improving capital allocation.
On the manufacturing front, Jain noted that the Budget has clearly identified seven strategic and frontier sectors for scale-up. Key initiatives include Biopharma Shakti, which aims to build a domestic ecosystem for biologics and biosimilars through institutions such as NIPER and accredited clinical trial sites, and India Semiconductor Mission 2.0, focused on equipment and materials development, full-stack Indian intellectual property, resilient supply chains, as well as research and training opportunities.
He also highlighted the expanded Electronics Components Manufacturing Scheme, among other initiatives such as Rare Earth Corridors to support mineral-rich states, launch of chemical parks in three states and targeted support for capital goods manufacturing. These include setting up hi-tech toolrooms for precision manufacturing, boosting construction and infrastructure equipment and developing a competitive container manufacturing ecosystem in the country. Also read | Union Budget 2026: India increases overseas individual investment limits in equities under PIS
Textiles have also received focused attention, with programs focused on fiber self-reliance, modernization of traditional clusters, targeted support for weavers and artisans, and strengthening the skills ecosystem through industry-academia collaboration.
Jain said the attention to detail in the budget is “impressive and commendable”, adding that while big-bang ideas grab attention, incremental improvements and niche initiatives are better suited for a diverse economy like India. He said the long-term target of increasing India’s share in global services exports from the current 4% to 10% remains intact.
On the macro front, Jain noted that the budget continues to prioritize fiscal consolidation, with the government maintaining its target of reducing the debt-to-GDP ratio to 50 plus 1 percent from the current 56.1 percent by 2030-31. With Covid-related fiscal pressures largely behind him, he expects consolidation headwinds to ease and real GDP growth to accelerate to around 7%, higher than the average over the past decade.
A major highlight of the budget, according to Jain, is the government’s continued push towards regulatory simplification. He pointed to the ongoing GST reforms, the Income Tax Act 2025 with streamlined rules and forms, and the rollout of new labor laws. The government is also rationalizing quality control orders, setting up high-level committees focused on deregulation and reducing compliance costs, and decriminalizing several violations in favor of monetary fines. Simplification of safe harbor rules, customs provisions and customs duty reversal structures further strengthens the business environment, he said.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)
#Budget #ticks #boxes #reasonable #opportunities #invest #months #Prashant #Jain