After an 18-month time correction in the Nifty, he believes large-cap stocks are reasonably valued and offer long-term compounding in line with nominal GDP growth. Small- and mid-cap stocks, however, remain less attractive as a category.
“In view of the above, this is a reasonable opportunity to get invested over the next few months,” Jain said, adding that long-term return expectations should be realistic at around 12% CAGR, broadly in line with nominal GDP growth and corporate profit expansion.
Jain said markets had gone into the Budget with elevated expectations, particularly after prolonged weakness and heavy foreign institutional investor selling ahead of the announcement. Instead of responding to short-term market pressures, the government chose to stay focused on long-term growth and stability. “Taxation and rules should not be tweaked to deal with short-term minor situations. Rather, taxation and policies should be stable, encourage growth and investment, be equitable and simple to administer,” he said.
He said specific measures such as the hike in Securities Transaction Tax on derivatives could help curb excessive speculation, while changes in taxation on buybacks were positive for improving capital allocation.
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On the manufacturing front, Jain noted that the Budget has clearly identified seven strategic and frontier sectors for scaling up. Key initiatives include Biopharma Shakti, which aims to build a domestic ecosystem for biologics and biosimilars through institutions such as NIPER and accredited clinical trial sites, and India Semiconductor Mission 2.0, focused on developing equipment and materials, full-stack Indian intellectual property, resilient supply chains, as well as research and training capabilities.
He also highlighted the expanded Electronics Components Manufacturing Scheme, alongside other initiatives such as Rare Earth Corridors to support mineral-rich states, the launch of chemical parks in three states, and targeted support for capital goods manufacturing. These include setting up hi-tech tool rooms for precision manufacturing, boosting construction and infrastructure equipment, and developing a competitive container manufacturing ecosystem in the country. Also Read | Union Budget 2026: India raises overseas individual investment limits in equities under PIS
Textiles have also received focused attention, with schemes aimed at fibre self-reliance, modernisation of traditional clusters, targeted support for weavers and artisans, and strengthening the skilling ecosystem through industry-academia collaboration.
Jain said the attention to detail in the Budget is “impressive and commendable”, adding that while big-bang ideas grab attention, incremental improvements and niche initiatives are better suited to a diverse economy like India. He said the long-term objective of raising India’s share in global services exports to 10% from the current 4% remains intact.
On the macro front, Jain noted that the Budget continues to prioritise fiscal consolidation, with the government maintaining its target of bringing the debt-to-GDP ratio down to 50 plus 1 percent by 2030–31 from the current 56.1%. With Covid-related fiscal pressures largely behind, he expects headwinds from consolidation to ease and real GDP growth to accelerate to around 7%, higher than the past decade’s average.
A key highlight of the Budget, according to Jain, is the government’s sustained push towards regulatory simplification. He pointed to ongoing GST reforms, the Income Tax Act, 2025 with streamlined rules and forms, and the rollout of new labour codes. The government is also rationalising quality control orders, setting up high-level committees focused on deregulation and compliance cost reduction, and decriminalising several offences in favour of monetary penalties. Simplification of safe harbour rules, customs provisions and duty inversion structures further strengthens the business environment, he said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)