Every year around Budget time, I’m reminded of conversations at home when I was younger. The adults would argue about prices, jobs, and the future; while the rest of us waited for dessert. The Budget for us felt distant and abstract. Today, after years in markets, I see it differently. Budgets don’t predict markets. But they do reveal intent. And intent matters.
The intent in Budget 2026–27 is fairly clear: jobs, capacity building, and financial plumbing.
Let’s start with jobs - The government has put job creation front and centre; not just as a slogan, but through incentives for manufacturing, skilling, and labour-intensive sectors. This is important. India’s demographic dividend only works if people are productively employed.
Otherwise, it becomes a pressure point. Job creation doesn’t show up immediately in quarterly earnings, but over time, it supports consumption, savings, and social stability. For long-term investors, this is the slow, unglamorous work that actually compounds.
Another interesting area is the continued push towards data centres, AI, and semiconductors. These are not buzzwords anymore. They are becoming core infrastructure — like roads and power were in earlier decades. Data is the new raw material. Compute is the new factory.
Building domestic capability here is expensive and complex, but strategically important. It also signals a shift in India’s growth model — from being largely a services consumer of global tech to becoming a builder of digital backbone. This will take time. There will be missteps. But directionally, it’s a bet on future relevance.
Which brings me to the changes in STT. The increase will likely have a negative impact on market depth, especially in the derivatives segment. Volumes may fall. Trading costs go up. But I don’t think this is accidental. It seems like a deliberate nudge away from excessive leverage and speculative activity in equities. Markets are healthiest when participation is broad and long-term, not when they resemble a high-speed casino. This doesn’t make equities unattractive. It just reminds us that discipline matters — and that not all activity is investing.
So what should a retail investor take away?
First, don’t overreact. Budgets are frameworks, not trading triggers. Second, recognise the long-term themes -- jobs, digital infrastructure, and financial market development. Third, think about asset allocation.
This Budget isn’t flashy. It’s not meant to be. Like good investing, it focuses on process over drama. And that, in my experience, is usually a good sign. For patient investors who understand that markets reward time, not timing, there’s a quiet reassurance in this year’s Budget.
Radhika Gupta
MD & CEO at Edelweiss Asset Management Limited (EAML)