he Union Budget 2025, scheduled for February 1, 2025, is anticipated to have a significant impact on India's stock market.nalysts expect the government to focus on measures such as income tax cuts to stimulate economic growth, arrest economic slowdown, and maintain macroeconomic stability.nhanced government schemes aimed at boosting rural incomes and increased income-tax exemption limits could benefit consumer staples and agricultural input companies.igher subsidies for fertilizers and capital infusion into state-owned insurers are also possible. notable income tax cut for individuals earning between ₹1 to ₹2 million annually is expected to lift consumer discretionary demand, positively impacting stocks like Jubilant FoodWorks and Maruti Suzuki.ob creation is likely to be a key focus, benefitting manufacturing, construction, and textile companies.he success of production-linked incentive (PLI) schemes in electronics may lead to their expansion, aiding companies like Syrma SGS.owever, extensive growth in capital expenditure appears unlikely, with a potential rise limited to 10%, which may pressure industrial sectors and companies such as Larsen & Toubro due to the competing demands of social spending.
n the previous year's budget, the government increased the long-term capital gains tax (LTCG) from 10% to 12.5% and the short-term capital gains tax (STCG) on certain assets from 15% to 20%.he LTCG tax exemption limit was also raised from ₹1 lakh to ₹1.25 lakh per year.hese changes led to a significant market downturn, with investor wealth falling by ₹8.85 lakh crore.nalysts suggest that while the likelihood of another hike in capital gains tax is low, any unexpected move could lead to a sharper market downturn, amplifying existing anxieties.
he Securities Transaction Tax (STT) was also increased, which, along with the hike in capital gains tax, dented market sentiment.he PHD Chamber of Commerce & Industry has urged the Finance Minister to abolish STT to reduce the tax burden on stock market investors. BS forecasts a limited impact of the Union Budget 2025 on the stock market, anticipating no changes in tax policy for capital markets and projecting that capital expenditure will grow slightly better than nominal GDP, focusing on infrastructure sectors like roads and defense.
n summary, while the Union Budget 2025 is expected to introduce measures aimed at stimulating economic growth and job creation, the stock market's reaction will depend on the specifics of these measures, particularly concerning tax policies and government spending.nvestors should monitor the budget announcements closely to assess their potential impact on various sectors and the broader market. Analysts' Expectations for India's Union Budget 2025
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