'Stock market isn’t excited because…': Finance expert after Budget 2025 tax relief

The Union Budget 2025 delivered significant tax relief for the middle class, but the Indian stock market remained largely indifferent. Amid the mixed reactions, Akshat Shrivastava, founder of Wisdom Hatch and a finance expert, provided his insights into how the tax cuts could reshape India’s economic landscape.

“If you make 12 lakhs, you will save between 80K to 1 lakh INR,” Shrivastava noted, highlighting the direct impact of Finance Minister Nirmala Sitharaman’s tax cuts. He estimated that around 1.4 crore taxpayers would benefit from these savings, amounting to approximately ₹1.4 lakh crore—a substantial sum that could either flow into expenditure or savings. “This will drive the domestic consumption story in India,” he added, suggesting that the tax relief could have far-reaching effects beyond immediate financial benefits.

However, despite the potential boost in disposable income, the stock market’s reaction has been underwhelming. The Sensex edged up by just 5 points to close at 77,506 on Saturday, while the Nifty slipped 26 points to 23,482. Shrivastava observed, “The stock market hasn’t really shown any positivity (yet) because the Indian market is still unattractive for foreign investors.” He attributed this to India’s slower economic growth rate, which dampens investor sentiment.

Shrivastava remains cautiously optimistic, pointing out that increased private consumption demand could eventually attract foreign investments. “Hopefully, with more private consumption demand picking up, foreign investors too will see high return opportunities in India. Let’s wait and watch,” he remarked.

Market experts share similar sentiments. Vinod Nair, Head of Research at Geojit Financial Services, said, “The market has responded to the Union budget with a mixed view, primarily due to the modest 10% YoY increase in capex for FY26, falling short of expectations.” He further said that sectors like railways, defense, and infrastructure, which typically influence market performance, saw limited gains. On the other hand, consumption-based sectors, expected to benefit from increased disposable income, had a muted impact due to their modest representation in the broader market.

Ajit Mishra, SVP of Research at Religare Broking, added, “The impact of the Union Budget could linger in the next session, particularly in the consumption sectors.” He noted that the Nifty might hover around current levels as investors await clear signals, with the upcoming earnings season likely to influence market movements.