Union Budget 2026: Defence likely to remain a priority sector; Railways, broader infrastructure to see steady allocations, say experts

Analysts opine that expectations for the Union Budget 2026 are anchored more in the depth of execution than in headline announcements.

After several years of capex-led policy, the market will look for continuity, fiscal realism, and targeted interventions rather than broad-based giveaways, they note.

The key test will be whether the government can sustain growth momentum while managing fiscal consolidation in an environment of uneven global demand and geopolitical uncertainty.

Sonam Srivastava, founder and fund manager at Wright Research PMS, says that overall, the Union Budget 2026 is unlikely to be dramatically market-moving in the short term, but a disciplined, growth-orientated budget focused on productivity, capex quality, and policy stability would reinforce India’s long-term investment narrative. The signal matters more than the size.

Agriculture

For agriculture, Srivastava notes that the focus should shift from price support to productivity. Incremental allocations toward irrigation, agri-infrastructure, warehousing, and crop insurance reforms would be far more impactful than higher MSPs alone.

Investments in agritech adoption, supply chain efficiency, and rural credit access could help stabilise farm incomes without distorting markets, which would be structurally positive for rural consumption over the medium term.

Defence

Defence is likely to remain a priority sector. Continued emphasis on indigenisation, higher domestic procurement, and long-term order visibility for private players would strengthen India’s defence manufacturing ecosystem. Budgetary support for R&D and exports could further improve margins and reduce dependency on imports, supporting sustained earnings growth for the sector.

Railways & Infrastructure

Railways and broader infrastructure spending are expected to see steady allocations rather than sharp increases. The emphasis should be on project execution, freight corridor expansion, rolling stock upgrades, and station redevelopment. Efficient capital deployment here has strong multiplier effects across cement, steel, logistics, and employment.

BFSI

For BFSI, the market will watch for measures that support credit growth without compromising asset quality. Capital infusion into public sector banks, clarity on bond market deepening, and incentives for long-term savings could help lower the cost of capital and improve financial intermediation.

Real Estate

For consumers, Budget 2026 should expand homeownership by cutting the hidden costs that quietly get passed on to buyers, says Samarth Setia, Founder, Rezio.ai.

Approval delays create a real “time tax” through interest, rework, and cost overruns, and that ultimately shows up in the final per-sq-ft price. Time-bound single-window approvals and stamp duty rationalisation can reduce this friction, while targeted relief for first-time and mid-income buyers through higher home-loan interest deductions can ease EMI pressure.

The definition of affordable housing also needs an update to reflect today’s metro realities, so incentives reach the segment that is actually buying, Setia added.

For developers, predictability is everything: faster clearances, cleaner rules, and sustained urban infrastructure capex that unlocks new catchments and makes more locations liveable and investable.

For brokers, compliance should be cheaper and simpler with a fully digital, standardised RERA registration flow, alongside stricter action against unregistered agents.

"Finally, regulate online property advertising the way Dubai does, with a Trakheesi-style permit that is issued and validated via State RERA and linked to government land-record systems, so portals publish only listings carrying a regulator-generated permit or QR. This can sharply reduce ghost listings, shorten decision cycles, and restore buyer confidence," Setia added.

Rezio.ai is a PropTech (property technology) startup that provides an AI-powered agent assistant and transaction management solution for real estate professionals. It aims to streamline real estate operations, improve sales performance, and reduce costs for brokers, agencies, and property developers.

Healthcare

Masaharu Morita, founder and programme director of the NURA – AI Health Screening Centre, said that as India prepares for the Union Budget, there is a crucial opportunity to reorient healthcare towards prevention and early intervention.

Non-communicable diseases (NCDs) continue to place a growing burden on individuals, families and public health systems, yet many conditions remain undetected until advanced stages. Strengthening structured screening programmes and enabling technology-led risk assessment can help identify disease earlier, improve outcomes and reduce avoidable hospitalisation.

Targeted policy support for preventive health infrastructure, workforce training and data-driven screening models can optimise long-term healthcare spending while easing pressure on tertiary care facilities. Encouraging public-private collaboration and integrating preventive screening into primary care pathways will be key to building a more sustainable system.

A forward-looking Budget that prioritises early detection, personalised risk profiling and preventive care can help India move from a treatment-centric approach to a healthier, more resilient population. This shift will support affordability, equity, productivity, and long-term national well-being across diverse communities nationwide and sustainably.