Work-in-progress Budget 2026

Description

As Budget 2026 unfolds, Monika frames it as a continuation budget - a work-in-progress focused less on headline reforms and more on keeping the economic machinery running smoothly. With pressure on the fiscal deficit after last year’s tax relief and GST cuts, the big concern was whether the numbers would hold. Despite weak nominal growth and a low GDP deflator, higher corporate taxes, indirect taxes, and dividends have helped contain the fiscal deficit at 4.4%, with only a marginal dip projected next year. For markets, this signals fiscal discipline at a time of global uncertainty.

Monika breaks down the key priorities shaping this budget - a sharp rise in defence spending, sustained capital expenditure, and a clear push to align India with strategic technologies such as semiconductors, rare earths, cloud infrastructure, and domestic IP creation. Running through the speech is a stated intent to simplify rules, ease compliance, and reduce friction between the state, businesses, and citizens, even as execution risks remain. On the personal finance front, there are no fresh income-tax changes, relief comes via lower TCS on overseas spending, and clarity emerges on sovereign gold bond taxation, while higher STT on derivatives sends a strong signal against excessive speculation.

In listener questions, the focus turns to what this budget really means for everyday investors - how changes to SGB taxation affect gold allocations, why the STT hike matters mainly for F&O traders and not long-term investors, and why market reactions immediately after the budget may not reflect India’s underlying growth story. The takeaway remains consistent: budgets will come and go, markets will react and recover, but maintaining the right asset allocation matters far more than chasing short-term noise.

Chapters:

(00:00 – 00:00) Budget 2026 as a Work-in-Progress Framework

(00:00 – 00:00) Fiscal Deficit, Defence Spending and Growth Priorities

(00:00 – 00:00) Sovereign Gold Bonds and Capital Gains Tax Changes

(00:00 – 00:00) TCS Relief and Easier Property Transactions

(00:00 – 00:00) STT Hike, Market Reaction and What Investors Should Do

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