Union Budget 2025-26

The Union Budget 2025–26, presented on February 1, 2025, delivered a consumption-oriented approach, with reforms to address the needs of the middle class, revive demand, and support fiscal consolidation. 

The government seem to have met market expectations on the fiscal consolidation front and has taken enough measures to provide the required boost to consumption by realigning tax slabs to provide an estimated relief of Rs. 1 lakh crore to the middle class.

As per the Finance Minister’s address, the budget was steered by the 4C framework:
  • Capex
  • Consumption
  • Creation of Employment
  • Consolidation (Fiscal)
 
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Budget Special – Mirae Asset Sharekhan’s Union Budget Review

Focus shifts to consumption

As expected, Union Budget 2025 gave priority to the consumption by way of a single masterstroke of ensuring over Rs. 1 lakh in additional savings in low-income categories by way of ensuring 100% tax rebate for income up to Rs 12 lakh per annum. In our view, this is going to have a long-lasting impact on the overall consumption space, including discretionary and consumer durables. We believe that consumption, which was a weak link of economic activities for the last several quarters will also start playing its role to support economic growth, hereon.

 

Key Highlights

Union Budget 2025-26 consisted of an equilibrium between driving consumption patterns and sustaining a level of fiscal discipline amidst prudent capex growth.

One of its major announcements was a 100% tax rebate for individuals who earn ₹12 lakh per annum, thus providing much needed respite worth ₹1 lakh crore, an initiative that has encouraged even more savings.

Budget 2025-26 has fostered a optimistic sentiment across the economy, resulting in higher stability and growth ahead of key policy transitions.

Capital expenditure has witnessed a decent increase of 10% with a particular focus on PPP (Public Private Partnership).

A more significant emphasis on sectors like MSMEs and other labour-intensive industries such as tourism, footwear, toys, food processing has also been observed.

There has also been a slight increase in allocation to power and defence sectors, while capex for railways hasn't been affected.

Mutual efforts and rate cuts from government and RBI are also expected to drive consumption levels higher.

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Budget Exclusive – Investment Picks by Mirae Asset Sharekhan Research

As a part of our Budget Exclusive reports, Mirae Asset Sharekhan’s reputed Fundamental Research Team has come out with stock picks in the Large Caps, Mid Caps and Small Caps segments

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Sectoral Analysis in light of Budget 2025-26

Sectors are bound to be impacted post a Union Budget. Mirae Asset Sharekhan breaks this down for you in our lucid Sectoral Analysis section – covering Consumer Goods, Consumer Discretionary, Power, Agri, fertilisers and chemicals, Banking & Financial Services, Infrastructure, Building materials, Real Estate, Capital Goods/ Defence/ Consumer Electronics/ Shipbuilding, Information Technology, Education, Pharmaceuticals/ Healthcare and everything in between.

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