People from all industries are experiencing more fear than ever before due to the impending Union Budget 2025. It is the second comprehensive financial blueprint of the Modi government's third term and will be presented by Nirmala Sitharaman on February 1, 2025, during her eighth year in office. This budget will boost development across all the important sectors while bolstering structural reforms, economic growth, and the aspirations of millions of Indians. Here's a thorough breakdown of the stocks to watch and what each sector is anticipating from this next budget.
Agriculture: The foundational industry of India
In order to address weather fluctuations and ensure farmers' financial stability, the agricultural industry is hoping for sector-specific reforms, one of the main expectations is the relaxation of loan payback regulations, which would allow farmers to pay back interest at the conclusion of the tenure instead of on a quarterly basis. As a result, liquidity issues throughout cultivation cycles will be lessened. Improvements to the Kisan Credit Card program, such as increased interest subsidies and crop protection measures, are also anticipated.
Additionally, farmers may save money if the GST is removed from necessary agricultural inputs like seeds, manure, and insecticides. In order to fight inflation and further enhance farmer welfare, it is hoped that the PM Kisan Samman Nidhi initiative will double the yearly financial assistance to ₹12,000 from ₹6,000 previously. There is discussion about extending MSP's coverage beyond the 22 crops it now covers.
Listed Stocks to Watch: UPL Limited, Coromandel International, Godrej Agrovet
Automobile: Quickening the Transition to Sustainable Mobility
The automotive sector highly anticipates reforms that would promote sustainability and growth. Simplifying the GST classification of automobiles and auto parts will facilitate compliance and boost productivity. Additionally, there is a lot of pressure to lower the 28% GST that is now applied to hybrid cars. If this rate were lowered, hybrids would become more reasonably priced and act as a transitional car between ICE and EVs.
Stocks to keep an eye on include TVS Motor, Bajaj Auto, Mahindra & Mahindra, and Tata Motors.
Real Estate: Creating Millions of Dreams
The real estate industry anticipates that Budget 2025 will be revolutionary. Homebuyers' financial strain will be lessened and housing demand will rise if the tax exemption ceiling on housing loan interest is raised from ₹2 lakhs to ₹3 lakhs. Developers will be able to obtain institutional funding at a lower cost thanks to the industry status.
To lessen the tax burden on developers and stabilize real estate prices, the GST's input tax credit regulations will also be changed. More individuals will be able to afford homes thanks to this, which will also encourage industry expansion.
DLF Limited, Godrej Properties, and Sobha Limited are stocks to keep an eye on.
Electronics: A Drive for Homegrown Manufacturing
The much-anticipated ₹25,000 crore Production-Linked Incentive (PLI) plan from the Indian government has the potential to significantly transform the electronics sector. In contrast to imports, the plan calls for increasing indigenous production of electronic components such PCBs, batteries, screens, and camera modules. At an estimated cost of more than ₹40,000 crore, it aligns with the 'Make in India' vision and is anticipated to generate components worth between $50 and 60 billion during its duration. This investment would further boost economic growth and establish India as a global leader in the electronics manufacturing ecosystem.
Stocks to Keep an Eye on: Tata Elxsi, Dixon Technologies, and Bharat Electronics Limited (BEL)
Pharmaceuticals: Progressing to Become a World-Class Pharma Centre
The creation of a unified regulatory body for medications and medical devices is a goal for the pharmaceutical industry. This might streamline licensing and compliance, reducing the burden and attracting investment. To improve access to healthcare in underserved places, policies for reconditioned medical equipment might be implemented.
Additionally, the recently implemented Patent Term Extension (PTE) and Data Exclusivity (DE) offer an accelerated system for patent submissions and approval, along with much-anticipated higher financial incentives for R&D. With these new developments, India may solidify its position as a major global pharmaceutical hub.
Sun Pharma, Dr. Reddy's Laboratories, Cipla, and Lupin are listed stocks to keep an eye on.
Education: Building a Better Future
Funding for the education sector is being significantly increased, reaching up to 6% of GDP. Students will be better prepared to tackle the new job markets of the future thanks to investments in digital education, particularly in the areas of integrating AI and machine learning. There are also plans to increase funding for STEM initiatives and teacher preparation programs.
In order to make education more inclusive, accessible, and globally competitive, the National Education Policy (NEP) 2020 changes and a reduction in the GST on educational services are among the requests.
NIIT Limited, Career Point, and Navneet Education are listed stocks to keep an eye on.
In conclusion,
Both for short-term difficulties and long-term objectives, this might serve as the cornerstone for revolutionary expansion in important industries. It may mark a turning point in India's economic trajectory, as outlined in the Union Budget 2025, with reforms in agriculture to improve farmer welfare, investments in EV and electronics manufacturing, real estate and pharmaceutical reforms, and legislation pertaining to education and cryptocurrency.
Investors and other interested parties will be anxious to observe how these reforms are implemented, which will open doors for practically every industry and listed stock. India is advancing towards being a developed nation by 2047, fostering innovation, inclusivity, and a strong economy.
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