5 Most Important Takeaways From Union Budget 2025-26

The Union Budget 2025-2026, which includes significant reforms in banking, energy, infrastructure, agriculture, and taxation, marks a move towards economic development. The budget allocation for FY 2025-2026 emphasises allocating Rs. 11.21 lakh crore (3.1 percent of GDP), the government has maintained its financial year 2026 disinvestment target at Rs 47,000 crore, announced Rs. 14.82 lakh crore gross market borrowing for FY26, and estimates the fiscal deficit for 2025-2026 to be 4.4 percent of GDP (4.8% for FY 2024-25) and the most awaited announcement in the Union Budget was that income tax payable up to Rs 12 lakh would not be taxed under the new regime. However, based on the findings of India's largest broking firms, these are the five main findings drawn from the Union Budget 2025.

5 Most Budget 2025 Highlights from the HDFC Securities

Major Tax Reforms to Boost Consumption

• Tax-free income limit raised to Rs 12.75 lakh, infusing Rs 1 lakh crore into middle-class households.
• Expected to stimulate consumer spending, benefiting FMCG, retail, and discretionary sectors.

Massive Agriculture & Rural Development Push

• Rs 1.7 lakh crore allocation (+21.7%) for agriculture and allied sectors.
• Kisan Credit Card (KCC) loan limit increased from Rs 3 lakh to Rs 5 lakh to support farmers.
• Dhan Dhanya Yojana was launched to improve productivity and post-harvest storage.

Infrastructure & Capex Growth, but Below Expectations

• Rs 11.2 lakh crore capex allocation, slightly higher than last year but lower than market expectations.
• Defence outlay increased by 13% (Rs 1.8 lakh crore), but capital expenditure remains underwhelming.
• Road & railway budgets remain stagnant, raising concerns over long-term growth.

Banking & Insurance Reforms

• The FDI limit in the insurance sector was raised from 74% to 100%, allowing foreign firms full ownership.
• ULIP taxation changes, making them less attractive investment options.
• Credit guarantee cover doubled for MSMEs & startups, boosting business funding.

Strong Push for Green & Renewable Energy

• The renewable energy budget was hiked by 53% to Rs 26,549 crore.
• Rs 20,000 crore Nuclear Energy Mission for Small Modular Reactors (SMRs).
• Expansion of PM Surya Ghar Muft Bijli Yojana for clean energy adoption.

5 Key Takeaways from the Union Budget As Per Axis Securities

1) Consumption Booster for the Middle Class: The Finance Minister has provided a consumption boost to the middle class by implementing a transformational reform in the tax structure, offering rebates for individuals with incomes up to Rs 12 Lc under the new regime. We believe that individuals in the Rs 12 Lc salary bracket will save approximately Rs 83,000 per year, translating to savings of around Rs 7,000 per month. This is expected to benefit the middle class. Urban consumption, which has been sluggish for multiple quarters, is likely to see a revival in the coming quarters. Sectors such as Retail, FMCG, QSR, Automobiles, and Travel & Tourism are expected to be the key beneficiaries.

2) Continued Thrust on CAPEX: The CAPEX spending in FY25 was sluggish due to the election year. The revised estimate for FY25 CAPEX spending was Rs 10.18 Lc Cr vs the Budget estimates of Rs 11.1 Lc Cr. For FY26, the government has set the CAPEX target of Rs 11.2 Lc Cr, a growth of 10% over the revised estimates. We believe these CAPEX estimates are reasonable and align with the nominal GDP growth rate of 10.1% for FY26. Its unwavering focus remains on Roads, Power, Urban Development, and Railways, sectors that are expected to drive significant long-term economic multipliers.

3) Fiscal Math Reasonable: Nominal GDP growth for FY26 is projected at Rs 356.97 Lc Cr, reflecting a robust increase of 10.1% from the revised FY25 figure of 324.11 Lc Cr. The government has set the fiscal deficit target at 4.4% for FY26, demonstrating fiscal prudence in the coming financial year, even with the landmark tax rebate for individuals with incomes up to Rs 12 Lc.

4) Significant Push for Rural and Skill Development: The budget's emphasis on Rural Development and Agriculture & Allied Activities, with a total outlay of Rs 2.66 Lc Cr and Rs 1.71 Lc Cr, respectively, is likely to benefit sectors such as Auto, FMCG, Fertilizer, and other rural-oriented industries moving forward. Additionally, the budget will indirectly support the rural sector through infrastructure improvements, tourism, fisheries, and skill development initiatives.

5) Positive Budget Play (Coverage): Ultratech Cement; Maruti; Hero Motocorp; Trent, Westlife Food; Avenue Supermart; Bajaj Finance; Prestige Estate; Indian Hotels. Positive Budget Play (Non-Coverage): Macrotech Developers (Real Estate play); Allied Blenders (Consumption Play); Metro Brands (Footwear Play); Exide industries (Support towards Green Mobility play); Thomas Cook (Travel & Tourism play).

5 Key Takeaways from the Union Budget As Per Bajaj Broking Research Team

1. The main announcement was that no income tax would be payable up to Rs 12 lakh under the new regime. Tax benefits will be in the range of 80,000 -1,10,000.
2. Fiscal deficit for 2025-26 is estimated to be 4.4 percent of GDP (4.8% for FY 2024-25)
3. Budget allocation for FY 2025-26 it highlights the earmarking of Rs.11.21 lakh crore(3.1 percent of GDP) towards capital expenditure. For FY25, the revised estimate is 10.18 lakh crore.
4. The government has announced Rs 14.82 lakh crore gross market borrowing for FY26, as compared to Rs 14.01 lakh crore for FY25. However, net market borrowing to finance the fiscal deficit is lower at Rs 11.54 lakh crore for FY26, from Rs 11.63 lakh crore in FY25.
5. The government has kept its financial year 2026 disinvestment target at Rs 47,000 crore, according to data from the Budget documents. For the financial year 2025, the revised estimate stands at Rs 33,000 crore, compared to the budgeted estimate of Rs 50,000 crore.

These points directly impact economic growth, industries, and investments, making them the most critical from a policy and market perspective.