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[hfe_template id='11223'] [ad_1] In my articles published in January 2024 and June 2024, I highlighted the importance of investors exercising caution in the capital goods sector. Since then it peaked and has been on a downward trajectory for six out of the last seven months, with just one flat month in between. The rationale remains unchanged - valuations remain high, with the S&P Capital Goods Index trading at a P/E ratio of 40, well above historical averages. The Union Budget 2025, presented for the eighth time by the Finance Minister, reflects a notable shift in the government’s economic approach. While last year’s budget increased capex allocation by 11.11%, this year’s rise is just 0.01%, indicating a clear move away from capex-driven growth One of the most notable budgetary measures is the reduction in taxes, which, while leading to an estimated INR 1 lakh crore revenue shortfall for the government, effectively translates into higher disposable incomes for midd...

[hfe_template id='11223'] [ad_1] The budget has balanced the twin objectives of fiscal discipline and much-needed growth support through targeted measures. The major highlights of this year's budget were direct tax cuts and rationalisation of tax slabs, measures that would benefit middle class households. This year's budget aligns closely with previous budget themes, presenting no major surprises in fiscal calculations. The themes of conservatism and consolidation remain prominent. As anticipated, the government is targeting a fiscal deficit of 4.4% of GDP in FY26. This move is seen as essential for consolidating the fiscal health while avoiding excessive borrowing that could lead to inflationary pressures. This reflects the government's intent to reduce its reliance on debt, which will have a positive effect on long-term economic stability. A key question was whether consolidation would come from revenue or capital expenditure. The budget indicates that the ...