As Finance Minister Nirmala Sitharaman prepares to share the Union Budget for 2025–26, experts are looking closely at key points like money management, building new places, and help for different sectors. With hopes high, global money groups and firms have given their views on what the budget may bring.
Money management and rural outlook
One big hope from the new Union Budget is that the government will work on money management. Jefferies, a top firm, thinks the government will aim to keep finances in check while helping people spend more by cutting income tax. The government may also grow help programs, mainly for rural areas, which could improve rural life and boost positive views among people.
Emphasis on electronics and green energy
The government might enhance plans for making electronics and semiconductors, giving a good lift to the electronics field. Jefferies also sees a rise in funds for green energy plans, primarily in solar energy, although changes in taxes on solar items could happen. These steps will match India’s goal to push green energy work.
Rise in foreign investment and housing aid
With the goal of growing the economy, Jefferies expects a rise in the limit for foreign portfolio investment (FPI) for banks and insurance from 74% to 100%. This could mean more chances for foreign investors. In housing, an extension of the interest help plan for city homes is likely, giving a boost to affordable housing lenders.
Effects on auto fuels and steelmakers
Global firm CLSA pointed out that any rise in tax on auto fuels might hit profits for major oil firms like Indian Oil, Bharat Petroleum, and Hindustan Petroleum. Yet, likely, LPG help could ease costs for many. Also, building funds may rise, with expected changes in import taxes on steel and coking coal that could help local steelmakers.
Keeping revenue growth and focus on Capex
A steady rise in revenue is on the horizon, with the government looking for fiscal ease to help boost the economy. A note from the Bank of America stressed that GDP growth will rely greatly on keeping capital expenditure (capex) on track, which is key for lasting growth.
Handling imports and protecting local makers
Macquarie has said the government may put import or safeguard taxes in place to stop the flooding of goods, mainly from China. This fits with the aim to protect local makers and push for self-sufficiency.
The whole view: Social and physical building
Morgan Stanley stated that the main things to watch will be how much money management is done, along with funds for both physical and social building. Plans for help in specific fields are also on the way, with a sharp focus on areas that could lead to long-term growth.
As the nation gets set for the Union Budget reveal on February 1, 2025, all eyes will watch these key areas, which could shape the economy for the years ahead.
