Yes Mutual Funds continue to be the best option for long term investments. They are less volatile than stocks and you get a professional to manage them for a small fee. They are more tax efficient than FDs and give inflation beating returns.
Post budget the Long Term Capital gains of 10% has bene introduced but even this does not reduce the appeal of mutual funds. Since there is an exemption upto Rs 1 lakhs, you can optimise this tax by staggering your withdrawals over time.