Budget 2026 Expectations: Fiscal Consolidation and Growth Focus
As India prepares for the Union Budget 2026, financial experts are outlining their expectations for the government's economic roadmap. Vikas Satija, Managing Director and CEO of Shriram Wealth, anticipates that the upcoming budget will maintain a strong emphasis on growth-oriented policies while managing fiscal discipline.
Fiscal Deficit Projections and Economic Priorities
In an exclusive interview with Mint, Satija shared his insights on the budgetary landscape. He expects the gross central fiscal deficit for FY27 to be set at approximately 4.2-4.3% of GDP, indicating that the pace of fiscal consolidation might be measured rather than aggressive. This projection reflects a balanced approach to supporting economic expansion while maintaining macroeconomic stability.
The government's continued focus on capital expenditure, particularly in critical infrastructure sectors like roads and railways, has been noteworthy in the current fiscal year. Satija believes this trend will persist, with the budget likely to introduce measures that bolster growth in key areas including infrastructure development, manufacturing enhancement, export promotion, and employment generation. Additionally, he anticipates stable policies concerning direct taxation to provide certainty for businesses and investors.
High-Net-Worth Individuals: Strategic Portfolio Management
Contrary to common assumptions, Satija observes that high-net-worth individuals (HNIs) are not making significant portfolio adjustments in anticipation of specific budget announcements. Instead, wealthy investors have evolved their approach, focusing on constructing portfolios aligned with long-term financial goals rather than reacting to short-term policy changes.
HNIs are increasingly looking beyond traditional savings instruments, seeking strategic diversification across various asset classes. There is growing interest in alternative investment avenues such as private credit, unlisted equity, Alternative Investment Funds (AIFs), and international exposures through regulated hubs like GIFT City. These moves are driven by the pursuit of better risk-adjusted returns and global portfolio diversification.
Investment Trends and Missed Opportunities
Satija notes that while global emerging markets delivered impressive returns recently—with the MSCI EM index significantly outperforming domestic indices—many HNIs missed this investment opportunity. Investors have become more discerning, evaluating each opportunity based on risk-return parameters and avoiding investments where post-tax returns don't justify the underlying risks.
There are subtle shifts occurring in HNI portfolios that may not be fully reflected in market indices. Wealthy individuals are increasing allocations to real estate, both directly and through AIFs, driven by demand for larger, luxurious residences. Additionally, there's growing interest in Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), which offer regular income streams and potential capital appreciation in tax-efficient structures.
Emerging Technology Sectors: AI and Beyond
When it comes to emerging sectors, artificial intelligence and space technology are attracting substantial investor attention. Satija believes these areas will remain focal points for wealthy investors over the next 2-3 years. Funding into AI startups has accelerated dramatically, with increased deal activity and capital flows into generative AI and enterprise AI solutions throughout 2025.
Beyond domestic technology opportunities, HNIs are also exploring global investments in AI and related deep-tech sectors, seeking diversified exposure across high-growth innovation areas. This reflects confidence in both technological innovation and long-term value creation potential within these transformative industries.
Disclaimer: This analysis is for educational purposes only. The views expressed represent individual perspectives and not institutional recommendations. Investors should consult certified experts before making investment decisions, as market conditions are subject to change.
