Jefferies Outlook on FY27 Union Budget **Executive Summary** Jefferies anticipates a stable FY27 Union Budget with limited surprises, characterized by a continued commitment to fiscal consolidation. The government is expected to balance fiscal discipline with strategic spending in key growth areas. **Key Strategic Focus Areas** * **Defense-Led Capex:** Capital expenditure is expected to remain robust, primarily driven by the defense sector. * **Targeted Consumption:** Support measures will likely be specific and targeted rather than broad-based. **Fiscal Scenarios & Market Implications** * **Base Case (4.2% Deficit):** The baseline projection places the fiscal deficit at approximately **4.2% of GDP**, aligning with consolidation goals. * **Growth Push Scenario (4.4% Deficit):** A deviation to a higher **4.4% deficit** would likely signal an aggressive push for growth. * *Equities:* Likely to view this positively as a growth catalyst. * *Bond Markets:* Likely to face pressure, resulting in higher yields.