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Here is what experts have to say about impact of the Union Budget.
CEOs
Aashish P Somaiyaa, Executive Director & CEO, WhiteOak Capital MF
The world is pivoting towards becoming bilateral as opposed to multi-lateral, a lot of business agenda will get driven by trade agreements in upcoming times with major player like USA which is looking for alternatives to China. Sometime soon, US markets will cool off once the initial AI euphoria is behind us and the dust settles with actual use cases and more grounded assessments come through; the dollar is likely to give up some of its strength allowing the rupee to stabilise, FPI flows will normalise and then this budget will look just great. It is time to get back into the markets, hopefully the worst is behind us. Indian investors should review their portfolios and take cognizance of factor and sector rotation in the markets.
B. Gopkumar, MD & CEO, Axis MF
The Union Budget unveiled today has been a responsive one, and rightly so, as the Finance Minister stated, it is on the path to accelerating growth and boosting middle-class consumption through lower tax rates. This bodes well for the common man, including senior citizens. The government’s fiscal strategy is credible as it moves forward on the path of fiscal consolidation.
Navneet Munot, MD & CEO, HDFC MF
Government’s intention of investing in economy, people and innovation was the need of the hour to harness India’s demographic edge. Set-up of Fund of Fund aimed at start-ups, along with a focus on MSMEs fosters entrepreneurship and could transform India from a nation of job-seekers to job-creators.
Simplification of tax structure and ease of compliance should aid in investor confidence and stimulate both, domestic and foreign investments. While short-term volatility could be par for the course due to the current global economic backdrop, the long-term direction rooted in policy prudence and support for growth should bolster Destination India’s credentials for foreign and domestic investors alike.
Nilesh Shah, Managing Director, Kotak Mahindra MF
The budget delivers on the expectations of the Triveni Sangam of reduction in fiscal deficit, support to urban consumption through tax cuts, and an increase in Capex through allocations to the center, states, and PSUs.
Radhika Gupta, MD & CEO, Edelweiss MF
This budget boldly addresses the need of the hour: putting money into the hands of the middle class through meaningful tax reliefs. This will energise consumption and growth at a critical time for the Indian economy.
Suresh Soni, CEO, Baroda BNP Paribas MF
The most remarkable aspect of the Union Budget 2025 is the bold revisions in the Income Tax slabs and rates which significantly benefits the middle class and has a direct positive impact on consumption as well as savings.
Sandeep Bagla, CEO - Trust MF
Tax slabs have been rationalised in personal income tax, increasing the purchasing power of the consumers. Demand will get a boost specially in consumer discretionary items like FMCG, auto etc. Government has not been able to spend in capital expenditure of 11 lakh crores this year, probably because of lack of credible projects and the increase in the outlay for next year to only 11.21 lakh crore is slightly disappointing. The private sector is unlikely to undertake large capex due to uncertainty over tariff wars and fears of dumping form China. It puts growth outlook under a cloud in the short run. The Government has undertaken measures to increase credit to important sectors like MSMEs and agriculture though. There has been emphasis on capacity creation in areas like education, health which will have long term benefits.
Vishal Kapoor, CEO, Bandhan AMC
The 2025-26 budget brings the focus back on firing domestic consumption and employment as the twin engines to accelerate the Indian economy. By focusing on MSMEs which play a crucial role in employment generation, exports and manufacturing output, the federal government is helping entrepreneurial India to grow and prosper. Boosting food production will help cushion food inflation and support the RBI's efforts in inflation targeting while making available credit to productive sectors of the economy. While maintaining the glide path towards fiscal consolidation, the reduction in income tax puts more disposable income in the hands of taxpayer, stimulating domestic household consumption and ensuring more savings are channeled to productive financial assets that facilitate wealth building, helping more savers become investors.
CIOs and fund managers
Alok Ranjan, Senior Fund Manager, ITI MF
From a sectoral perspective, the budget appears to benefit consumption-driven industries like FMCG, consumer durables, automotive, and other consumer sectors. Tax relief announced is expected to further stimulate the economy. Overall, there is optimism about the market’s medium to long-term outlook, driven by the budget’s pro-growth and investment-friendly measures.
Anurag Mittal, Head of Fixed Income at UTI MF
The budget continued the path of inclusive development by boosting personal spending while continuing the trajectory of fiscal consolidation. The borrowing number is marginally higher than bond market expectations as government has not kept any short-term borrowings. This is more positive for short to medium end of the yield curve. The road map of debt/gdp to 50% by 2031 is positive from a medium-term structural perspective.
Deepak Ramaraju, Senior Fund Manager, Shriram MF
Though the budget did not add any negativity to the capital gains, the markets may remain buoyant for the medium term. Cutting personal taxes may lead to higher savings, which might result in increased SIP flows, potentially supporting the markets further. Capital market-related sectors such as AMCs, and brokerage houses may expect higher retail participation.
Mahendra Kumar Jajoo, CIO Fixed Income at Mirae Asset MF
The budget is expected to provide a major boost to consumption with the massive reliefs on income tax front for the lower and middle class. At a time when the economic moment was slowing down and incremental capex was beginning to generate a declining multiplier factor on the margin, as was desired by most analysts, budget has delivered this mega booster for renewed consumption boost.
Mahesh Patil, CIO, Aditya Birla Sun Life MF
Budget remains on its fiscal consolidation path. Focuses on simplification of tax structure to ensure ease of business. A big boost to consumption by giving more money in the hand of consumers. Thus, a balanced budget with focus on stimulating demand side which was the need of the hour and moderate growth in investments. For investments, the baton needs to now shift to private sector to do the heavy lifting. From market perspective we could see some sector rotation into consumer facing sector from investment related sectors. We believe this budget and a further easing of liquidity in the monetary policy next week, will pave the way for recovery in the economy.
Nimesh Chandan, CIO, Bajaj Finserv MF
The government has continued the path of fiscal consolidation. In fact, among the major economies, India has seen the best fiscal consolidation. This also creates room for monetary easing for RBI. The recovery post-Covid-19 was a ‘K’ shape recovery. Wherein, the upper segment has done well, but the middle & lower levels did not grow much. This budget takes care of this difference by reducing the burden on the middle class taxpayers. The allocation on capital expenditure was a tad lower than expected but will be much better than revised estimates for FY25.
Rajeev Radhakrishnan, CIO - Fixed Income, SBI Mutual Fund.
There has been a conscious attempt to spur consumption by rationalising personal tax slabs with a revenue foregone of Rs 1 trillion. Apart from the overall focus to sustain capex and reforms in key thrust areas, the budget announcements have an intended focus on ensuring sustained economic growth. At the same time, the fiscal consolidation trajectory has sustained with FD estimated to reach 4.4% in FY26 in line with estimates. From a bond market perspective, the gross borrowing numbers at Rs 14.8tr is higher than market estimates and could be mildly negative. However, RBI liquidity operations such as OMO's should ensure a supportive environment for yields.
Vinay Paharia, CIO, PGIM India MF
The Union Budget 2005-26 has adhered to the path of fiscal consolidation and has clearly favoured boosting consumption over investment demand. FM has preferred consumption by transferring money in the hands of tax paying middle class. This could lead to improved consumption demand, which had seen a slowdown since last 2 quarters. On the flip side, capital expenditure has been curtailed in a relatively lower base and is now expected to grow in line with the nominal GDP.
Vinit Sambre, Head - Equities, DSP MF
Various measures aimed at improving the ease of doing business—such as simplifying regulations and promoting the "Make in India" initiative—should eventually stimulate private investment. Additionally, putting more money into the hands of individuals through tax savings is expected to benefit consumer-oriented businesses.
CBOs
Anand Vardarajan, Chief Business Officer, Tata MF
Tourism was one of the significant contributor to services in GDP in FY24. The announcement of developing 50 top tourist destination in a holistic way is a big step to boost this sector even further. We are seeing a surge in travel led by leisure, business, pilgrimage or even medical tourism. Specific interventions could further bolster prospects for this sector. We have a Tourism fund which strives to take advantage of such opportunities that the sector presents.
