Saurabh Mukherjea, Co-Founder & CIO, Marcellus Investment Managers

“The Union Budget 2026–27 is directionally positive for India’s long-term economic health, even though markets have reacted nervously in the short term. The increase in Securities Transaction Tax on F&O trading is a necessary corrective. Over the past few years, speculative derivatives trading activity has destroyed large amounts of household capital, and this move should help redirect savings towards consumption and productive investment. Equally important is the government’s decision to set up a high-level committee to review the banking and financial system, which could accelerate PSU bank privatisation and unlock greater participation from global and domestic private capital.

The key concern, however, is the rise in capital expenditure at a time when tax revenues are undershooting. Funding higher capex through increased borrowing risks tightening financial conditions by pushing up bond yields and the economy’s cost of capital. Overall, the Budget takes important structural steps in the right direction, but its effectiveness will ultimately depend on maintaining fiscal discipline while pursuing growth.”