Budget 2026-27 Focuses on Long-Term Growth Over Short-Term Market Relief: Report

New Delhi: The Union Budget 2026-27 has emphasised sustainable economic growth, fiscal discipline and assured execution rather than short-term market appeasement, according to a report released on Wednesday.

The report by PL Wealth, the wealth management division of PL Capital, stated that the medium-term outlook remains positive for sectors such as infrastructure, capital goods, defence, logistics, manufacturing and export-driven industries including engineering goods, textiles, and gems and jewellery.

It further noted that equity markets could witness short-term sectoral shifts as investors adjust to domestic policy priorities and gain clarity from the India-US trade agreement.

On fixed income investments, the firm indicated that bond markets may face short-term pressure on yields due to increased supply and uncertainty in global interest rates. However, over the medium term, higher yields could improve return prospects, particularly for high-quality bonds.

The report also highlighted that infrastructure assets such as InvITs and REITs, along with private credit and selected private equity opportunities, could serve as effective diversification tools amid fluctuations in equity markets and bond repricing.

According to the firm, higher government borrowing and liquidity adjustments following the Budget could cause temporary volatility across asset classes, but these should be seen as transitional rather than signs of economic distress.

For long-term investors, the Budget strengthens confidence in India’s medium-term growth outlook, supported by continued public investment, expansion in manufacturing and services, and policy consistency.

Inderbir Singh Jolly, CEO of PL Wealth Management, stated that in the current environment, maintaining disciplined asset allocation, careful duration management and selective investment in structural growth sectors would be the most effective way to build wealth while managing short-term uncertainties.

The report added that the medium-term investment outlook remains strong, driven by public capital expenditure, manufacturing incentives and policy stability. The government’s policy approach focuses on strengthening capital formation, boosting domestic manufacturing and enhancing service sector competitiveness, while continuing gradual fiscal consolidation.

With capital expenditure allocated at Rs 12.2 lakh crore, marking an 11.5 per cent year-on-year increase, and the fiscal deficit targeted at 4.3 per cent of GDP, the Budget aims to strike a balance between economic growth and macroeconomic stability.