Union Budget 2026: Finance Minister Nirmala Sitharaman Set for Historic 9th Consecutive Presentation
Finance Minister Nirmala Sitharaman is poised to present the Union Budget 2026 on Sunday, February 1, marking a significant milestone in India's fiscal history. This will be her ninth consecutive budget presentation and the 88th budget since India's independence, underscoring her continued stewardship of the nation's economic policy.
According to analysis from brokerage firm Bajaj Broking, the government's overarching strategy appears centered on sustaining structural economic growth while simultaneously revitalizing domestic demand. This approach follows recent significant policy initiatives, including GST rationalization measures and the sweeping income tax relief announced in the previous budget, all while maintaining a commitment to fiscal prudence.
Navigating Global Challenges with Strategic Focus
"Against a backdrop of ongoing geopolitical instability and tariff-related disruptions, the government is expected to carefully balance its long-term infrastructure ambitions with the near-term imperative of cushioning the economy from external trade shocks," the firm noted in its comprehensive analysis.
The brokerage highlighted that the budget is anticipated to carefully navigate these complex global dynamics while advancing India's domestic economic priorities. This balanced approach is seen as crucial for maintaining economic stability while pursuing ambitious development goals.
Top Five Sectors Expected to Receive Significant Attention in Union Budget 2026
Based on detailed analysis from Choice Institutional Equities and Bajaj Broking, several key sectors are likely to remain prominently featured in the upcoming budget announcements. These sectors represent critical areas for India's economic growth and strategic development.
Defence Sector: Major Spending Increase Anticipated
Defence spending is projected to rise by approximately 20% year-on-year, driven by multiple strategic factors. Ongoing geopolitical tensions, the pressing need for force modernization, and a strong governmental push toward indigenization are all contributing to this expected increase.
The allocation continues to emphasize capital expenditure, highlighting a structural shift from importing defense platforms to manufacturing long-cycle defense equipment domestically. Several key programs are currently in the platform finalization phase, including Tejas Mk-2, QRSAM, and MRSAM systems.
These initiatives are expected to receive execution approvals soon, offering multi-year revenue visibility for domestic defense manufacturers and significantly boosting the sector's outlook. Among the top stock picks in the defense sector are Bharat Electronics, Bharat Dynamics, and Data Patterns.
Railway Sector: Sustained Infrastructure Development
Railways are expected to maintain high priority in this year's budget, although allocation increases may be more moderate compared to the steep rises witnessed in previous years. The government is likely to continue emphasizing track expansion, comprehensive electrification projects, signaling modernization, station redevelopment initiatives, and improvements in freight efficiency.
Public sector undertaking stocks such as RVNL, IRCON International, and Jupiter Wagons are among the top picks identified by analysts for potential investment consideration in the railway sector.
Infrastructure and Real Estate: Driving Economic Growth
The Infrastructure and Real Estate sectors are anticipated to remain key focus areas, given their critical role in driving broader economic growth, generating substantial employment opportunities, and sustaining investment momentum across the economy.
"We expect the government to sustain elevated capital expenditure levels (INR 11.21 trillion announced in the Union Budget FY 2025–26) to accelerate infrastructure and urban development," the brokerage firm stated in its analysis. Top stock picks in this sector include Sobha and Smartworks Coworking Spaces.
Information Technology Sector: Digital Economy Boost
The brokerage firm expects the budget to focus on accelerating domestic capacity creation through various fiscal incentives, rationalized power tariffs, faster approval processes, and easier land access. These measures are likely to be supported by tax relief provisions, duty waivers, and green-energy benefits, particularly amid rising data consumption patterns across the country.
"We expect FY26 Budget to boost digital consumption through continued investment in digital public infrastructure, artificial intelligence, and cloud technologies. With the digital economy growing from approximately 12% of GDP toward an estimated 20% by FY30, tax relief, GST rationalization, and clear data, cross-border, and startup policies could drive monetization, scale-up, and global competitiveness," the firm elaborated. Tata Consultancy Services and Meesho are among the top stock picks in the IT sector.
Automobile Sector: Emerging as Economic Powerlifter
Bajaj Broking believes that Union Budget 2026 presents a clear opportunity for the Auto Sector to emerge as a key 'powerlifter' for the Indian economy. "Focused measures, such as enhanced incentives for electric vehicle manufacturing and exports, strengthening domestic component ecosystems will reduce import dependence. Targeted support for technology adoption and research & development could materially accelerate scale, competitiveness, and long-term value-creation across the sector," the firm explained.
Among the top stock picks in the automobile sector are Mahindra & Mahindra, TVS Motor, and Lumax Auto Technologies.
Disclaimer: This analysis is provided for educational purposes only. The views and recommendations presented above are those of individual analysts or broking companies, and not of Mint. Investors are strongly advised to consult with certified financial experts before making any investment decisions.
