The recently released Smallcase Managers Budget 2025-26 Survey Report sheds light on key expectations from the upcoming Union Budget. Conducted among over 100 managers on the Smallcase platform, the survey highlights a strong consensus on the need for tax reforms, sectoral incentives, and policies prioritizing sustainable economic growth.
Fiscal Discipline and Borrowing Trends
Over 50% of surveyed managers expressed confidence in the government's fiscal prudence, expecting the fiscal deficit for FY25 to remain below 5%. However, 75% anticipate increased government borrowing, signalling a commitment to driving growth through higher expenditure.
Growth and Inflation Outlook
Optimism around GDP growth remains high, with 56% predicting growth in the 6-7% range, and 17% expecting it to exceed 7%. Inflation forecasts align with the Reserve Bank of India's target, as 52% of managers believe it will hover between 4-5%. A smaller group (9%) anticipates inflation falling below 4%, suggesting improving price stability.
Push for Income Tax Reforms
The report underscores the need for personal income tax reforms to bolster consumption. Managers advocate for higher exemption limits and streamlined tax slabs to increase disposable incomes. Changes in capital gains tax and incentives for renewable energy, manufacturing, and startups are also expected. Expansion of the Production-Linked Incentive (PLI) scheme for sectors like semiconductors, green energy, and electronics is likely.
Sectoral Priorities
Infrastructure, defense, and renewable energy are poised to receive significant budgetary allocations, reflecting their critical role in economic growth and sustainability. Other sectors like healthcare, education, and logistics are expected to benefit from strategic investments to improve quality of life and development outcomes. Export-oriented industries may also see boosts under the "India+1" policy.
Rising ESG Investments
The report highlights the growing importance of Environmental, Social, and Governance (ESG) investments, driven by policy alignment with sustainability goals and increased interest in renewable energy.
Government Spending Focus
The survey predicts a pivot from politically motivated subsidies to growth-oriented capital investments in infrastructure, healthcare, and skill development. Managers believe such measures will stimulate innovation, create jobs, and enhance India's global competitiveness.
The Smallcase survey reflects cautious optimism, balancing fiscal discipline with strategic investments, tax reforms, and sectoral incentives. As Union Budget 2025-26 unfolds, these insights highlight the priorities that could shape India's economic trajectory in the coming year.
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