Kotak Securities anticipates India's Union Budget for Financial Year 2026-27 (FY27) will hinge on five significant policy decisions poised to influence both equity and bond markets. The brokerage expects the government to prioritize stability amid global uncertainties, adopting a measured approach to fiscal consolidation. It projects the gross fiscal deficit at 4.3% of GDP for FY27, a marginal reduction from the estimated 4.4% in FY26, suggesting a deliberate easing of the consolidation path. Another key decision flagged is the continued focus on capital expenditure, with Kotak forecasting a 9% growth in capital spending for FY27. This aligns with broader analyst expectations for increased infrastructure spending. The report also suggests limited scope for major fiscal stimulus or populist measures, given existing fiscal constraints and prior tax reliefs. Revenue projections indicate a 9% growth in gross tax revenue for FY27, bolstered by an estimated ₹2.9 trillion surplus transfer from the Reserve Bank of India. However, the fifth crucial decision involves higher government borrowing, estimated at ₹16 trillion in FY27, which Kotak warns could exert pressure across the bond yield curve. This comprehensive analysis from a credible financial institution like Kotak Securities provides an important pre-budget outlook for the Indian audience.