Key Measures in Union Budget 2025: Insights from Anirudh Garg of Invasset PMS

As we approach the Union Budget 2025, the Indian stock market is currently experiencing significant pressure, primarily driven by a combination of foreign capital outflows and a range of pressing macroeconomic concerns that have been affecting investor sentiment. These outflows have raised alarms among market participants, as they reflect a broader apprehension regarding the stability and attractiveness of the Indian market in the eyes of global investors. The recent fluctuations in global economic conditions, coupled with domestic challenges, have further compounded these issues. Investors are closely monitoring the situation, hoping that the upcoming budget will not only introduce much-needed tax reforms but also boost capital expenditure to invigorate economic growth across various sectors of the economy.

The anticipation surrounding the budget is palpable, as stakeholders from different sectors are eager to see how the government plans to address the current economic challenges that are weighing heavily on market performance. The apprehension is particularly pronounced among foreign investors, who have been pulling back their investments, leading to a growing concern about the sustainability of market performance in the long term. Analysts suggest that strategic tax reforms could play a crucial role in enhancing investor confidence and attracting foreign direct investment (FDI), which is essential for fostering long-term economic stability. Such reforms could include measures to simplify the tax structure, reduce compliance burdens, and create a more predictable tax environment, thereby making India a more attractive destination for foreign capital.

Moreover, an increase in capital expenditure is seen as vital for stimulating growth across various sectors of the economy. By prioritizing investments in infrastructure projects, renewable energy, and public services, the government can create jobs, boost demand, and ultimately drive economic recovery in the face of ongoing challenges. Infrastructure development, in particular, has a multiplier effect; it not only creates immediate employment opportunities but also enhances productivity and connectivity, which are essential for long-term economic growth. As the budget date approaches, market participants are hopeful that the government will unveil a comprehensive plan that not only addresses immediate concerns but also lays the groundwork for sustainable growth in the years to come. This plan is expected to outline specific initiatives aimed at revitalizing key sectors, ensuring fiscal responsibility, and promoting inclusive growth that benefits all segments of society.