Share Market Highlights 1 February 2025: Sensex, Nifty see muted reaction as Budget 2025 prioritises consumption over capex

Prof Vishwanathan Iyer, Professor of Finance at Great Lakes Institute of Management, Chennai

With India’s projected GDP growth of 6.3% to 6.8% in fiscal year 2026, the 2025 budget is important for sustaining economic momentum. An important push toward manufacturing, infrastructure and digital transformation can increase large productivity and large job creation. India’s continued economic growth will depend considerably on planned investments in small and medium-sized enterprises, skill development and AI-driven innovation

Dr. Vikas Prakash , Director – PGPM & Professor, Great Lakes Institute of Management, Gurgaon

The GDP growth rate band of 6.3-6.8% is commendable given the uncertainty surrounding the global business environment. This is in line with various surveys done by Business Channels. The Chief Economic Advisor needs to be given full credit. Deregulation is the main theme of the Economic Survey. It says ‘Get out of the Way’. If we recall the 1991 budget presentation we see it was more of getting out of the way of the business than giving fiscal incentives. This theme comes from the fact that the private sector’s contribution to investment has been lacking. The lack of fiscal room with the government can be compensated by getting out of the way. The economic survey gives a strong message for initiating ‘Ease of Doing Business’ at state levels. Several states have very high stamp duty. It needs to be rationalized. Factory act needs to be reformed. While we have been giving more incentives to MSMEs it has in turn discouraged companies to go beyond MSME status. We need more companies to grow bigger to enjoy economies of scale and bring down the average cost of production. The budget will have to do something to rationalize the incentives to MSMEs and large-scale companies

On Education sector

Dr. Jones, Principal and Head of the Institute of Management, Great Lakes Institute of Management, Gurgaon.

*”Last year’s budget was a mixed bag for higher education. Support for world-class institutions increased by about INR 400 crores, but education access was severely curtailed for the less privileged by the ending of scholarships and student aid programs. Allocation for interest subsidy on student loans was missing. Funding for scholarships for higher education students was also absent. A stagnation in total budgetary allocation fails to compensate for rising inflation. It also affects the expansion of suitable infrastructure.

India spends about 4.5% of the national GDP on education, while developed countries spend anywhere between 6-14%. There is a stark gap there. The UGC’s funding in the 2024-25 budget was reduced by a staggering 61% compared to the immediate previous year. Needless to say, a lot more can be done in the 2025-26 budget for higher education.

In the 2025-26 budget, it is expected that more emphasis will be placed on digital learning, skills development, technical and professional education, and teacher upskilling by greater fund allocations. On the lines of building world-class institutions, it is expected that there will be more thrust on internationalization initiatives and support, as well as developing educator infrastructure. R&D is expected to continue to receive more attention in the new budget.

A nation that educates its citizens has a longer chance of global success.”*

Arti Dawar, Deputy CEO, Shiv Nadar School

“Given the NEP’s targeting a Gross Enrolment Ratio (GER) of 50% by 2035 in higher education, including vocational education and the increased focus on Education 4.0, the education sector continues to aim for a 6% GDP allocation to education. We expect the government to increase collaboration with industry on internships, skill-based training, and investments in technology-driven solutions. The introduction of the PM Vidyalakshmi scheme to provide financial support to meritorious students would improve access to education and help achieve GER targets. Additionally, there is a need to establish a fast-track process for patent applications and grants for educational institutions”

Aditi Nayar, Chief Economist, Head – Research & Outreach, ICRA Limited on CORE DATA

The core sector growth eased slightly to 4.0% in December 2024 from the revised 4.4% in November 2024, with four of the eight constituents witnessing a deterioration in their performance between these months. However, this was largely in line with the average growth of 4.0% seen during October-November 2024.

The YoY growth in cement output decelerated quite sharply to 4.0% in December 2024 from 13.5% in the previous month, led by the dissipation of the favourable base. Among other constituents, the growth in output of coal, refinery products and fertilisers witnessed a modest deceleration between these months.

ICRA expects the IIP growth to moderate somewhat to ~3-5%…

Sourabh Deorah, CEO & Co-Founder, AdvantageClub.ai:

“As Budget 2025 draws closer, we have a great opportunity to create meaningful tax relief for salaried employees especially considering their evolving financial and lifestyle needs. With the cost of living steadily climbing, financial stress has become a major factor affecting job satisfaction and overall productivity. The government can really step up here by offering tax benefits that align with what employees need to thrive today.

For me, one big game-changer could be expanding tax benefits under the new regime. This includes things like gym memberships, therapy, and holistic wellness services. Right now, Section 80D mostly focuses on health insurance, but it’s time for a broader, more forward-thinking…

Spokesperson- Abhishek Dua , CEO & Co-Founder, Showroom B2B

On Manufacturing Industry:

“The upcoming Budget 2025-26 presents an opportunity to enhance India’s industrial capabilities by expanding the Production-Linked Incentive (PLI) scheme. Incorporating high-demand sub-sectors, including retail, India can attract substantial investments and reduce import dependency. Simplifying processes for MSMEs through streamlined applications and performance-linked benchmarks will attract investments, reduce import dependency, and strengthen their role in the value chain.

Additionally, Incentives for local manufacturing and export-focused policies aim to reduce unemployment and boost India’s global competitiveness under “Make in India” and “Atmanirbhar Bharat.” Ta…

On Retail Industry:

Spokesperson: Kashika Malhotra , Head of Business Development, Brandman Retail

“With Indian retail projected to reach $1.8 trillion by 2030, we anticipate that the upcoming budget may address key concerns of the sector. A reduction in the GST rate on footwear from 18% to 12%, corporate tax from 25% to 20%, and customs duty on footwear from 38.5% to 22% could potentially make goods more affordable and boost consumer demand. We also anticipate measures like faceless assessments for GST-related matters to streamline compliance and enhance ease of doing business. These steps, if introduced, could significantly strengthen the retail ecosystem and drive long-term economic growth.”

On AI & Technology

Spokesperson- Sourabh Deorah, CEO & Co-Founder, AdvantageClub.ai

“With India’s AI market poised to reach a remarkable $17 billion by 2027, the upcoming budget has the potential to solidify our position as a global tech challenger. Prioritizing investments in AI research, digital infrastructure, and emerging technologies will be crucial for maintaining this growth trajectory. Simplifying taxes, addressing GST on SaaS platforms, and offering targeted incentives for startups will empower innovation, job creation, and scalability. A balanced focus on infrastructure spending and fiscal discipline will not only sustain economic momentum but also position India as a global hub for AI and technological advancement.”

On Employee Tax Simplifica…

[8:04 am, 1/2/2025] KS BadriNarayanan: On Pharmaceutical Industry:

Spokesperson – Dr. Saurabh Arora, Managing Director, Auriga Research

“The pharmaceutical sector is in anticipation of the new 2025-26 Budget wishful for a range of actions being taken by the state in terms of reengineering the research, development, and innovation connection. The weighted income tax deductions could again be given to research and development since that was considered to be calculated from the present budget, provided that the scope of R&D included points from new drug development to clinical trials. If the government were to consider aiding technology up-gradation in a big company, it might introduce a performance-linked model along the lines of the PLI scheme. ”

On Healthcare Industry:

Spokesperson – Mr Raja S., Founder and Managing Director, Hearzap

“The healthcare sector in India is experiencing tremendous progress, as we look forward to the 2025-2026 budget, it is vital to maintain this momentum by addressing key areas such as rural healthcare infrastructure, digital health adoption, and fostering public-private partnerships. Expanding resources for primary and preventive care, coupled with targeted investments in training and research, will not only bolster the healthcare system but also drive economic growth. India’s ability to deliver affordable and accessible healthcare for its vast population relies on consistent and strategic efforts.”

On Real Estate Industry:

Spokesperson – Vaibhav Khanna, CEO & Co-Founder of Ezstays 

“Student housing is emerging as a distinct and promising asset class in Indian real estate. We anticipate measures in the budget to incentivize private and institutional investors to explore this segment, such as tax benefits for REITs focused on student housing. The co-living and student housing sector in India is projected to grow at a CAGR of 17% by 2027, highlighting its potential. Recognizing and supporting this asset class would bridge the gap in quality accommodations and create long-term value for students and investors alike.”

On ESG Industry:

Spokesperson: Mr. Rajesh Patel, Co-founder & CEO of Snowkap

“As India shift towards a greener economy, the upcoming budget holds a great potential to drive sustainability and climate action. A key area of focus should be climate risk management, underpinned by initiatives like RB-CRIS. Additionally, the government should consider policies that encourage businesses to integrate ESG principles deeply into their operations. This not only boosts their resilience but also unlocks significant long-term value and attracts responsible global investors. 

By continuing to reduce duties on renewable energy, the government is not only advancing its climate commitments but also encouraging innovation and investment in green technologies aligning with India’s net-zero ambition by 2070.”

On Insurance Industry:

Spokesperson: Deepanker Mahajan CEO and Co-founder, CoverYou 

“As we approach the Union Budget 2025, it’s imperative to recognize that the rapid advancement of technology has transformed the healthcare sector, introducing both innovative opportunities and new challenges. Healthcare professionals now face digital threats and increased instances of violence, underscoring the critical need for comprehensive insurance solutions. By enhancing financial literacy and insurance awareness, we can enable healthcare providers to make informed decisions that protect their practices and patients, fostering a culture of proactive risk management