Ahead of the Union Budget 2026, set to be presented on February 1, experts widely expect defence, railways, and broader infrastructure to remain priority sectors for government allocations. The Upstox article, corroborated by multiple credible sources, highlights a continued emphasis on indigenization within the defence sector, anticipating higher domestic procurement, robust R&D support, and long-term order visibility for private players to strengthen India's defence manufacturing ecosystem. This focus aligns with the 'Atmanirbharta' (self-reliance) initiative and aims to reduce import dependency while supporting sustained earnings growth for the sector. Railways are also projected to receive steady allocations, with an expected 10-12% increase in capital expenditure, pushing the total outlay to approximately ₹2.7-2.9 trillion. Modernization efforts, including the rollout of Vande Bharat sleeper trains, doubling allocations for the 'Kavach' safety system, and investments in decongestion (track doubling, new lines) and advanced signalling, are anticipated to be key areas. Rating agency ICRA projects a 5% growth in the rail budget. For broader infrastructure, experts foresee a continued push on capital expenditure, attracting private capital, and emphasizing Public-Private Partnerships (PPPs). While overall capital expenditure is expected to grow by a modest 9-10% to ₹12.4-12.5 lakh crore in FY27, some analysts warn that growth might be selective, with segments like roads and housing potentially experiencing flatter allocations compared to other infrastructure-linked sectors. The overarching theme for Budget 2026 is expected to be a disciplined, growth-oriented approach, prioritizing productivity, quality of capital expenditure, and policy stability to reinforce India's long-term investment narrative, rather than broad-based giveaways.