As we move closer to Union Budget 2026, it is a good time to look back at the sectoral themes that stood out during Budget 2025. Historically, the Union Budget has acted as a sentiment trigger for select sectors, and last year was no different.
Below is a snapshot of key themes from Budget 2025 and some stocks that remained in focus.
1. Tax Relief
Tax relief for the middle class was one of the most anticipated aspects of Budget 2025. Expectations of higher disposable income supported sentiment across consumer discretionary segments such as automobiles, retail, and lifestyle spending.
2. Boosting Consumption
With GDP growth slowing to 5.4 percent in Q3 FY25, the budget focused on reviving consumption through tax rationalisation, easier credit availability, and tweaks in tax slabs.
3. Railways
The railways sector continued to see strong policy support, driven by investments in modernisation, safety, and capacity expansion, reflecting the government’s long-term vision for public transport.
4. PSU Divestment
Although divestment targets for FY25 were not fully achieved, expectations of more realistic divestment estimates for FY26 kept PSU stocks in focus, particularly those with improving fundamentals.
5. Electronic Manufacturing Services
The government’s focus on Make in India strengthened expectations around new PLI schemes for electronic components and semiconductors, benefiting EMS players.
6. Defence
Defence spending was expected to remain between 1.9 percent and 2 percent of GDP in FY26, keeping the spotlight on indigenous manufacturing and defence exports.
7. Renewable Energy
Allocation to the Ministry of New and Renewable Energy increased sharply in FY25, reinforcing the government’s focus on clean energy and energy transition.
8. Infrastructure
The government’s continued focus on infrastructure development through initiatives such as the National Infrastructure Pipeline and Gati Shakti supported long-term growth prospects for the sector.
9. Agriculture and Allied Sectors
Agriculture continued to receive policy focus, with expectations of higher budgetary allocation and improved access to institutional credit through Kisan Credit Cards.
As we head into Budget 2026, which of these themes do you think could return to the spotlight, and are there any new sectors you are watching closely?