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Union Budget FY27 - Fixed Income Perspective - Feb 2026

Repo Rate changed at 5.25 per cent
03 February 2026
    Local Market Commentary
    Download the full reportPDF, 2.82MB

    Union Budget FY27 - Fixed Income Perspective - Feb 2026

    The Budget focused on three C's = Consistency, CapEx and Consolidation

    • Consistency in tax policy, spending allocations, sectoral push - MSMEs Semiconductors 2.0, Textiles; Streamlined customs/import duties. A 20 year tax holiday for data centre in hi-tech sector while for labor-intensive manufacturing the focus was more on infra connectivity and smoothening of processes/operational ease
    • CapEx thrust continued despite the headwinds to revenue mobilization and sticky recurring expenditure
    • Consolidation commitment adhered to; With the new avatar and anchor, the pace of fiscal consolidation for FY27 continues but is rather slow-paced in nature. Rightly so, given the income tax rate changes and Goods & Services Tax (GST) rate changes of FY26

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