Smallcase has released its Managers Budget 2025-26 survey report, highlighting expectations from the upcoming Union Budget. The survey, which involved over 100 managers on the Smallcase platform, reflects a strong anticipation of tax reforms, sectoral incentives, and a continued focus on sustainable growth.
Fiscal discipline and borrowing
The report indicates cautious optimism regarding fiscal discipline. Over 50% of Smallcase managers expect the fiscal deficit to remain below 5%, demonstrating confidence in the government’s ability to manage finances prudently.
At the same time, more than 75% of respondents predict an increase in FY25 borrowing, signaling a likelihood of heightened government expenditure to fuel economic growth.
Optimism around growth and inflation
Smallcase managers remain optimistic about GDP growth for FY25. While 56% expect growth to fall between 6-7%, 26% foresee a slightly lower range of 5-6%.
Interestingly, 17% are hopeful that growth could exceed 7%, underscoring cautious yet positive sentiments about India’s economic trajectory.
When it comes to inflation, 52% of managers predict it to hover between 4-5%, aligning with the Reserve Bank of India’s target.
A smaller segment, around 9%, expects inflation to drop below 4%, indicating confidence in moderating price pressures.
Income tax reforms to boost consumption
The survey stresses the need for reforms in personal income tax structures.
Smallcase managers expect higher exemption limits and rationalised tax slabs to enhance disposable incomes.
Such changes, they believe, could drive consumption and support the broader economy.
Changes to the capital gains tax structure are also anticipated, along with targeted incentives for sectors such as renewable energy, manufacturing, and startups. The government may expand Production-Linked Incentive (PLI) schemes for industries like semiconductors, electronics, and green energy, while offering additional support for research and development initiatives.
Changes to the capital gains tax structure are also anticipated, along with targeted incentives for sectors such as renewable energy, manufacturing, and startups. The government may expand Production-Linked Incentive (PLI) schemes for industries like semiconductors, electronics, and green energy, while offering additional support for research and development initiatives.
Infrastructure, defense, and renewable energy are likely to dominate budgetary allocations. These sectors are critical to strengthening India’s economic and geopolitical resilience while addressing sustainability goals.
Other sectors, including health, education, transportation, and logistics, are also expected to receive attention, as they are pivotal for improving quality of life and ensuring long-term development.
Export-oriented industries and electronics manufacturing may benefit from the “India+1” policy and government incentives for R&D and production.
Meanwhile, managers highlight the importance of sectors like e-commerce, aerospace, and green energy, which are being driven by changing global trends and domestic policy shifts.
Focus on ESG investments
The report also points to a surge in interest in ESG (Environmental, Social, and Governance) investments. Managers attribute this trend to increasing policy alignment with sustainability goals, particularly in the renewable energy space.
Government spending priorities
The survey suggests that the government may cut politically motivated subsidies while prioritising growth-driven investments. Capital expenditure on infrastructure, healthcare, and skilling development is expected to increase significantly, with managers predicting that such measures will stimulate innovation, create jobs, and enhance India’s global competitiveness.
