The government will continue its focus on improving quality spending, strengthening the social security net and to bring down the fiscal deficit to 4.5% of the GDP in FY26, a finance ministry document said.
Finance Minister Nirmala Sitharaman is scheduled to present the Budget for 2025-26 in Parliament on February 1.
The Union government is committed to pursuing the glide path of fiscal consolidation as announced in the Budget for FY 2021-22 and to attain a level of fiscal deficit lower than 4.5% of GDP by FY 2025-26, according to the Finance Ministry statements on the half-yearly review of the trends in receipts and expenditure and deviation in meeting the obligations of the government under the Fiscal Responsibility and Budget Management Act, 2003.
The statements were tabled in the Lok Sabha last week.
“The thrust will be on improving the quality of public spending, while at the same time, strengthening the social security net for the poor and needy. This approach would help further strengthen the nation’s macro-economic fundamentals and ensure overall financial stability,” it said.
According to the statements, the Budget 2024-25 was presented in the backdrop of global uncertainties caused by the wars in Europe and the Middle East.
India’s sound macro-economic fundamentals have cushioned the country from the vagaries afflicting the global economy.
“It has also helped the nation pursue growth with fiscal consolidation. As a result, India retains its pride of place as one of the fastest-growing economies in the world. However, risks to growth still remain,” it said.
Total expenditure was estimated at about ₹48.21 lakh crore, of which, expenditure on revenue account and capital account were estimated at about ₹37.09 lakh crore and ₹11.11 lakh crore, respectively, as per the Budget Estimate (BE) of 2024-25.
As against total expenditure of ₹48.21 lakh crore, the expenditure in the first half of FY25 was ₹21.11 lakh crore or about 43.8% of BE.
Taking into account the grant for the creation of capital assets, the effective capital expenditure (Capex) was projected at Rs 15.02 lakh crore.
Gross Tax Revenue (GTR) was estimated at about ₹38.40 lakh crore with an implied tax-GDP ratio of 11.8%.
Total non-debt receipt of the Centre was estimated at about ₹32.07 lakh crore. It comprised tax revenue (net to Centre) of about ₹25.83 lakh crore, non-tax revenue of about ₹5.46 lakh crore, and miscellaneous capital receipts of ₹0.78 lakh crore.
With above estimates of receipts and expenditure, the fiscal deficit was pegged at about ₹16.13 lakh crore in BE 2024-25 or 4.9% of GDP.
In H1 of FY25, the fiscal deficit is estimated at ₹4.75 lakh crore, or about 29.4% of BE.
The fiscal deficit was planned to be financed by raising ₹11.13 lakh crore from market (G-sec + T-Bills), and the remaining amount of ₹5 lakh crore from other sources, such as NSSF, State Provident Fund, External debt, draw down of cash balance, etc.
Disclaimer: Moneywealth research provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
SEBI registered research analyst
Call or whatsapp: +91 9924987385 / +91 7096190322
Nifty at 26,000; RIL, HDFC Bank, and Titan are the top stock picks for 2025.
As 2025 is just around the corner, Ravi Singh — Senior Vice-President (Retail Research) at Religare Broking — sees benchmark Nifty50 at 26,000 level in the upcoming calendar year. He advises maintaining a well-diversified portfolio with a long-term perspective to navigate market uncertainties. “With geopolitical and economic risks expected to influence the Indian stock market in the coming year, a cautious approach is advisable,”
From the railway pack, the market expert expects BEML Ltd to benefit from government initiatives and increased infrastructure investments. In response to a query on the defence counters, he believes Hindustan Aeronautics Limited (HAL) and Mazagon Dock Shipbuilders Ltd are ‘compelling’ choices for long-term investors, underpinned by their strong fundamentals and growth potential. Retailers’ participation in Indian stocks is likely to remain robust next year, adds Religare’s Singh.
He also says the ongoing China-US trade tensions could benefit sectors like pharmaceuticals and companies like Dr Reddy’s Laboratories may gain from increased generic drug demand. For 2025, the market specialist says Reliance Industries (RIL), HDFC Bank Ltd, and Titan can deliver strong returns as the upcoming year is expected to bring heightened challenges and increased volatility compared to 2024. Here are the edited excerpts from the interview:
Q – What are your targets for Sensex and Nifty for 2025-end? Give rationale.
A – By the end of 2025, the Nifty 50 index is projected to reach approximately 26,000, reflecting expectations of low single-digit returns and economic stability in India. Currently, the markets are experiencing high volatility, driven by significant global events such as the change in the US government, geopolitical tensions, and anticipated US Fed rate cuts.
Looking ahead, two critical risks — geopolitical instability and economic uncertainty — are expected to heavily influence the Indian stock market over the next year. If these challenges are resolved favourably in the coming months, the market could regain positive momentum. However, in the absence of clarity, the overall market outlook is likely to remain cautious and subdued.
Q – What lessons should retail investors learn from 2024?
A – The stock market in 2024 offered valuable investing lessons, underscoring the importance of diversification amidst heightened volatility driven by geopolitical tensions and economic uncertainties. It emphasized the necessity of maintaining a disciplined, long-term investment strategy. Ultimately, resilience and informed decision-making emerged as critical components for successfully navigating market challenges.
Q – What should be the strategy for 2025? How should investors construct their portfolio next year?
A – In 2025, maintaining a well-diversified portfolio with a long-term perspective will be essential for navigating market uncertainties. Investors should carefully align their portfolios with their financial goals, risk tolerance, and time horizon. With geopolitical and economic risks expected to significantly influence the Indian stock market in the coming year, a cautious approach is advisable. Prioritising diversification and increasing exposure to defensive sectors can help mitigate risks and safeguard investments during periods of heightened uncertainty.
Q – Name 3 key foreseen events that could have bearing on stock market in 2025
A – Over the next year, three primary risks — geopolitical tensions, trade frictions, and economic uncertainties — are expected to have a significant impact on the Indian stock market. Geopolitical challenges, coupled with continued trade tensions and economic headwinds in China, are likely to strain the fiscal positions of major economies. These dynamics are expected to exert pressure on sectors such as IT and Realty
In light of these risks, reducing heavy exposure to these vulnerable sectors may be prudent in the near term. Instead, focusing on defensive sectors can offer greater resilience against market volatility, providing stability amid uncertain conditions.
Q – How much interest rate cut do you forecast for India in 2025? Name sectors and stocks that you think can gain the most.
A – India’s interest rate outlook for 2025 remains uncertain, though experts anticipate a potential reduction of 25–50 basis points. Such a cut would lower borrowing costs, stimulate consumer spending, and provide a boost to growth-oriented stocks. The recent easing of food inflation has created favourable conditions for this policy shift, which could significantly benefit the FMCG sector.
As the RBI navigates the complexities of monetary policy, both investors and consumers are closely monitoring its next steps. Companies such as Swiggy, Zomato, and Flipkart stand to gain from reduced borrowing costs, enabling them to expand operations and enhance profitability in a more conducive economic environment.
Q – Railway stocks made a comeback after falling steeply earlier this year. How do you see sector prospects … which are the stocks from the sector that you like the most?
A – The railway stocks exhibit strong growth potential, driven by the government’s focus on infrastructure development and the rising demand for efficient transportation solutions. Among them, BEML Ltd, a leading manufacturer of railway coaches and wagons with a market capitalisation (m-cap) of Rs 18,168.25 crore, is well-positioned to benefit from government initiatives and increased infrastructure investments, which enhance the sector’s growth outlook.
Other notable railway stocks to consider include Container Corporation of India Ltd, Jupiter Wagons Ltd, and Titagarh Rail Systems, all of which are poised to capitalise on the expanding opportunities in India’s railway and transportation sector. However, investors should conduct thorough research and carefully evaluate various factors before making investment decisions.
Q – Defence sector has immense scope, but many listed stocks are probably trading ahead of fundamentals. Name a few stocks that still look reasonable. Give rationale.
A – In the defence sector, Hindustan Aeronautics Limited and Mazagon Dock Shipbuilders emerge as compelling choices for long-term investors, underpinned by their strong fundamentals and growth potential. HAL stands to benefit from the government’s focus on indigenous defence production, a robust order pipeline, and its demonstrated execution capabilities. Key growth catalysts for HAL include a potential GE deal and export opportunities, such as with Argentina, which could substantially enhance its revenue stream. Similarly, Mazagon Dock Shipbuilders, with its emphasis on innovation, modernization, and export expansion, is well-positioned for sustainable growth. Both HAL and Mazagon Dock Shipbuilders exhibit clear growth drivers and maintain reasonable valuations compared to peers, making them attractive options for investors seeking value in the defence sector.
Q – Do you think retail participation in stocks may stay strong in 2025? Do you see more measures from the market regulator to safeguard retail investor interest? If yes, what could they be?
A – Retail participation in Indian stocks has surged in recent years led by greater financial literacy and a growing middle class and it’s likely to remain robust in 2025. SEBI may enhance protections by promoting investor education, ensuring fair access to IPOs, and tightening regulations around brokerages, helping safeguard retail investors and encouraging long-term participation.
Q – Trump’s trade war will be in focus in early 2025. Which domestic sectors and stocks could benefit from China-US trade war?
A – The ongoing China-US trade tensions could benefit sectors like pharmaceuticals, with companies like Dr Reddy’s Laboratories gaining from increased generic drug demand. IT companies such as TCS and Infosys may capture outsourcing demand as businesses diversify away from China, while textile and consumer goods could gain from supply chain shifts.
Q – Net FPI inflows in 2024 were uninspiring. Will FPI keep maintaining distance or do you see a comeback in 2025?
A – After weak inflows in 2024, India may see a rebound in FPI investments in 2025, driven by improving global sentiment and strong domestic growth. Regulatory reforms and attractive valuations could draw foreign investors back to Indian markets, especially in sectors with solid fundamentals.
Q – 3 Nifty stocks that you think can deliver solid returns in 2025; and why?
A – The upcoming year is expected to bring heightened challenges and increased market volatility compared to 2024, emphasizing the need for disciplined risk management and a cautious investment approach. Amid this backdrop, Reliance Industries, HDFC Bank, and Titan stand out as strong candidates for delivering solid returns in 2025. Reliance is well-positioned to benefit from its diversified growth engines across Retail, Digital Services, and New Energy, supported by improving GRM margins and robust gas pricing in its O2C and upstream businesses. HDFC Bank, leveraging its technology-driven operational efficiency, improving profitability, and industry-leading growth potential due to a lower CD ratio, offers a compelling value proposition. And, Titan’s unmatched dominance in the jewellery market, bolstered by the reduction in gold import duties, further strengthens its prospects for continued growth and profitability
Disclaimer: Moneywealth research provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
SEBI registered research analyst
Call or whatsapp: +91 9924987385 / +91 7096190322
