As FM Nirmala Sitharaman is all set to present the Union Budget 2025-26 on Saturday, the three things everyone should keep an eye on are fiscal consolidation, spending on infrastructure, and sectoral sops, which is what leading global brokerages and financial institutions say.
Income tax cuts will boost consumer discretionary spending, while welfare scheme expansion will drive rural recovery, Jefferies predicts.The brokerage also sees positives for electronics manufacturing - expanded PLI or semiconductor manufacturing schemes. Increased allocations to renewable energy programmes and solar cell and module duty tweaks.
Jefferies also expects FPI limit for banks and insurance companies to be increased from 74% to 100%. Urban housing interest subsidy scheme expansion to benefit affordable housing lenders. No changes expected in tobacco taxation.
CLSA says excise duty hike on auto fuels will impact Indian Oil, Bharat Petroleum and Hindustan Petroleum margins. LPG subsidy increase will be a relief. Higher infrastructure spending, import duty on steel or coking coal duty reduction will benefit steel companies.
Bank of America says revenue growth will be steady, shift from deficits to debt management. Fiscal policy easing and capex revival will drive GDP growth. Bank of America report.
Macquarie says government may impose import or safeguard duty to counter China dumping.
Morgan Stanley says fiscal consolidation, infrastructure, sectoral sops.
The Union Budget will be presented by Finance Minister Sitharaman on February 1, 2025.
