Insights Union Budget 2025

A Budget for the Nation, A Vision for the Future3 min read

January 24, 2025

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A Budget for the Nation, A Vision for the Future3 min read

As Union Budget 2025-26 inches closer, the buzz around it grows louder. People from corporate boardrooms to small investors are eagerly speculating about what Finance Minister Nirmala Sitharaman will unveil on Budget Day. For businesses and investors alike, the budget is more than just numbers; it’s a roadmap that dictates the country’s growth story.

While the fine print will be revealed on Feb 1, certain sectors are already under the spotlight, expected to receive significant policy attention. Let’s explore five key industries likely to dominate the headlines and shape India’s economic trajectory post-budget.

1. Defense: Bolstering India’s Security

What’s the Buzz?

With India’s defense spending among the highest globally, the sector is likely to see a significant boost in allocation to modernize infrastructure, promote indigenous production, and address national security concerns.

  • Union Budget 2025-26 Projection: Likely to remain steady at around ₹6.5 lakh crore. Source: Ministry of Defence
  • Key Focus Areas: Advanced weapons systems, Make in India initiatives, and incentives for private sector participation in defense production.
Source: Union Budget Documents

2. Electric Vehicles (EV): Accelerating Green Mobility

Why EVs?

India’s commitment to achieving net-zero emissions by 2070 has placed EVs in the spotlight. Expect policies around incentives for EV buyers, battery manufacturing subsidies, and support for charging infrastructure. India has established an objective to elevate the proportion of Electric Vehicle (EV) sales to 30% in private cars, 70% in commercial vehicles, 40% in buses, and 80% in two-wheelers and three-wheelers by the year 2030. 

  • Key Schemes: Faster Adoption and Manufacturing of Electric Vehicles (FAME-II).
  • Growth Potential: India’s EV market is expected to grow at a CAGR of 49% between 2022-2030. Source: NITI Aayog
Source: IBEF | JMKResearch

Note: Investors should keep an eye on policies for battery swapping, import duty cuts on components, and green hydrogen subsidies.

3. Infrastructure: The Engine of Growth

Why It Matters?

Robust infrastructure is the backbone of any growing economy. From railways to urban housing, the government’s continued push to spend on large-scale projects could ensure long-term economic gains.

  • Union Budget 2024-25 Infra Allocation: Likely to surpass ₹11.5 lakh crore. (Source: Economic Survey 2024)
  • Key Focus Areas: Greenfield expressways, smart cities, and railway electrification.
Source: Moneycontrol | Moneycontrol

Impact: Infrastructure stocks like Larsen & Toubro, GMR Infra, and IRCTC may gain from these announcements.

4. Renewable Energy: Powering Sustainability

Budget Expectations 

The government is expected to prioritize renewable energy investments, particularly solar and wind power, to meet its ambitious targets under the National Solar Mission and Green Hydrogen Mission.

  • Union Budget 2024 Allocation: ₹35,000 crore for renewable energy projects.
  • Target: Achieve 500 GW of renewable energy capacity by 2030.

Source: The Financial Express

Source: IEA

Impact: Policy tweaks like production-linked incentives (PLIs) for solar panel manufacturing could benefit stocks operating in this category.

5. Banking & Financial Services: Strengthening the Backbone

Why This Matters?

With growing retail demand and financial inclusion programs, the sector may see reforms related to digital banking, credit growth, and loan restructuring for MSMEs.

  • Key Reforms to Watch: Capital infusion in PSU banks, measures to boost NBFC growth, and enhanced fintech penetration.

Note: Banking, NBFCs, and new-age fintech players could benefit from increased focus on digital lending and financial inclusion.

Conclusion: Where Should You Focus?

The Union Budget 2025-26 could prove transformative for several industries, but these five sectors – defense, EVs, infrastructure, renewable energy, and banking – stand out for their growth potential. Investors and traders should watch out for key announcements, as they could offer significant opportunities for long-term wealth creation.

By understanding these sectors, you can align your portfolio with emerging trends and government priorities, staying one step ahead in the financial game.

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