Let us dive straight into analysing the major impact of the 2025 budget:
Stock market
It is expected that the 2025 budget will have a significant impact on the financial market. Most prominently, the budget stated an increase in the long-term and short-term capital gains taxes. The long-term capital gains tax has been increased to 12.5% from an earlier 10%, and the short-term capital gains tax has been raised to 20% from the earlier 15% (for equity-oriented funds).
Besides these changes, the government has also raised the Securities Transaction Tax to 0.02% from 0.01%. On the face of it, these steps could discourage savings and investments in the stock market.
FMCG
Another big impact of the 2025 budget may be on the FMCG sector. The industry is expected to undergo rapid expansion as it has received a capital expenditure allocation of Rs. 11.11 lakh crore. In addition to this, several other reforms are also in the works which will enhance the self-sufficiency of the sector in India, with a special focus on the production of oil seeds like sesame, sunflower, mustard, and soybean, and pulses.
The 2025 budget also had a special focus on agriculture, like natural farming, which will indirectly contribute to the FMCG sector’s growth.
Real estate
The 2025 budget also had announcements expanding the Pradhan Mantri Awas Yojana to construct 3 crore more homes in urban regions. This is expected to boost affordable housing in real estate, increasing the demand for labour and construction materials.
Besides this, the budget also laid out plans for the construction of infrastructure, vegetable supply chains, and industrial parks surrounding these urban areas to create further opportunities in these regions.
Mobile phones
The budget is also expected to influence the smartphone sector. This is because the custom duty on smartphones has been reduced from 20% to 15%. This is also applicable to smartphone accessories like chargers, adapters, and circuit board assemblies. This should empower more people to purchase imported smartphones at lower rates to boost overall sales in the market.
Gold
Precious metals, along with gold, should also receive a big boost as the 2025 budget reduced the customs duties on gold, along with a few other precious metals and gems. Gold and silver saw a reduction in customs duty to 6% from the earlier 15%. Similarly, silver and gold dore had customs duty reduced to 5.35% from 14.35%.
This may reduce gold bond returns as they are linked with the current gold prices.
Automobile
While the automobile sector did not have any direct announcements impacting it, a variety of factors are expected to influence the industry. One such measure is the reduction of customs duties on 25 minerals. This is significant because one of the minerals is lithium, a core part of EV battery manufacturing. This is expected to bring down the cost of making EVs, encouraging more people to make the switch to electric vehicles.
