Union Budget 2025: Halwa Ceremony Secrets & Big Predictions Revealed!

The stage is set for the iconic Halwa ceremony, marking the final leg of preparations for the Union Budget 2025-26. On Friday evening, January 24, Finance Minister Nirmala Sitharaman will lead this time-honoured ritual at the North Block of the Central Secretariat. She’ll be joined by MoS Pankaj Chaudhary, senior officials, and the dedicated budget team.

What’s the Halwa Ceremony?

A signature tradition of the Finance Ministry, the Halwa ceremony kicks off the printing of budget documents. As part of the event, the Finance Minister and her team prepare and serve halwa—a symbolic sweet treat to energize the rigorous process. Once the ceremony wraps up, staff involved in budget preparations enter a 8-10 day "lock-in," cut off from external contact (except emergencies) to maintain utmost secrecy.

Countdown to Budget Day

The big day is almost here! On February 1, 2025, FM Sitharaman will deliver her 8th Budget speech at 11 a.m. Even though it’s a Saturday, stock markets (BSE and NSE) will remain open. This will be her second full Budget under Modi 3.0 and her eighth overall, including six annual and two interim Budgets during the NDA tenure. 

From tax tweaks to sectoral reforms, expectations are sky-high as taxpayers, investors, and industries wait to see what’s in store. Stay tuned as we break down what each sector is hoping for in this year’s Budget!

Fiscal Policies & Tax Reforms

A fiscal deficit target of 4.5% is expected to please stock markets, as it signals macroeconomic stability while balancing fiscal consolidation and growth. This leaves room for capital expenditure, a critical driver of economic expansion.

On taxes, there’s plenty of buzz about reforms that could benefit both individual taxpayers and businesses. Here’s what’s anticipated:

• Personal Income Tax: Revisions in tax slabs and higher deductions under the new tax regime could be on the table.
• Simplified Tax Laws: A new income tax bill might replace the 1961 Income Tax Act, cutting the complexity and trimming its length by 60%.
• GST Rationalization: Simplified compliance measures and lower rates for select sectors are expected to make an appearance.

For investors, a stable tax regime will be key. Any hikes in STT (Securities Transaction Tax) or LTCG (Long-Term Capital Gains) taxes could dampen retail and foreign participation, so policymakers will likely tread carefully. 

Conversely, easing LTCG norms or creating a more investor-friendly tax environment could boost market sentiment and participation.

Budget 2025: Sector-Wise Expectations & Stock Implications

1. Railways

The railway sector is gearing up for a big boost in the Union Budget 2025-26, with plenty of action expected around high-speed rail projects, electrification, modernization, and green initiatives. Enhancing tourism-focused routes is also likely to be a priority. 

The Gross Budgetary Support (GBS) for the Ministry of Railways is anticipated to increase by 15–18%, reaching Rs 2.9 lakh crore–Rs 3 lakh crore. Stocks like RVNL, BEML, IRFC, IRCON, and TITAGARH are well-positioned to gain from these developments. 

2. Defence

The defence sector is likely to see continued emphasis on the “Make in India” initiative, focusing on boosting domestic production and export capabilities.

Key expectations include:

• Increased Allocations: Higher budgetary support for indigenous defence manufacturing and R&D.
• Export Promotion: Enhanced support for companies to expand their global footprint.
• Indigenization Drive: Strengthening local supply chains to reduce dependence on imports.

The push for self-reliance in defence manufacturing is expected to benefit industry leaders such as Bharat Electronics, Bharat Dynamics, Hindustan Aeronautics, Mazagon Dock, and Cochin Shipyard, all recognized for their robust order books and expertise in indigenization.

3. Infrastructure

The Union Budget 2025-26 is expected to prioritize infrastructure development to drive growth, generate employment, and address critical economic challenges. A 10–12% rise in capital expenditure to Rs 12.3 lakh crore is anticipated, up from Rs 11.11 lakh crore.

Key Focus Areas

• Traditional Infrastructure: Increased investments in roads, highways, railways, energy, and tourism.
• Emerging Segments: Boost to data centres, renewable energy, and smart industrial cities, along with an expansion of the Kavach anti-collision system in railways.
• Public-Private Partnerships (PPPs): Strengthening PPP frameworks to encourage private sector participation.

Impact on Industries and Stocks

• Infrastructure: Beneficiaries include L&T, KNR Constructions, and Ahluwalia Contracts.
• Cement: Higher demand from increased spending on roads and housing is expected to benefit stocks like Ultratech Cement, Ambuja Cements, JK Cement, and ACC.

4. Real Estate & Affordable Housing

The real estate sector anticipates several supportive measures:

• Reintroduction of the Credit-Linked Subsidy Scheme (CLSS) under the Pradhan Mantri Awas Yojana (PMAY)
• Enhanced Section 24(b) exemptions on housing loan interest
• Tax incentives for affordable housing developers

These measures could positively impact stocks like Oberoi Realty, DLF, Anant Raj, Godrej Properties, PNB Housing, AAVAS Financiers, and Home First Finance.

5. Renewable Energy

India’s renewable energy goals are ambitious and achieving them will need robust policy support and incentives. Here’s what’s on the radar:

• Boosting Capacity: Annual capacity additions need to hit 50–60 GW – a big jump from the current pace of 28 GW per year – to achieve the 2030 target of 500 GW from non-fossil fuel sources.
• Lowering Costs: Reducing import duties on critical raw materials could help cut project costs and encourage faster deployment.

According to industry experts, the sector needs a massive $1 trillion in investments over the next decade to stay on track. Any positive policy announcements in the Budget could benefit companies like Adani Green Energy, SW Solar, NTPC, and Tata Power, making this a space to watch closely.

6. Semiconductors

The semiconductor industry has outlined several key expectations to foster growth and establish India as a global manufacturing hub:

• Tax Incentives: The industry expects increased tax benefits, such as production-linked incentives (PLI) and tax holidays, to encourage local semiconductor manufacturing.
• Reduction in Import Duties: There is a demand to reduce customs duties on raw materials, components, and equipment to lower production costs and make India more competitive globally.
• R&D Tax Deductions: Industry leaders are pushing for higher tax deductions for R&D expenditures to promote innovation within India’s semiconductor ecosystem.

These initiatives could positively impact stocks like ABB, Kaynes Technology, CG Power, and Dixon Technologies, among others.

7. Pharma & Healthcare

The pharma & healthcare sector seek government initiatives to boost growth, infrastructure, and innovation. Key recommendations include:

• Healthcare Budget: Increase allocation by 2.5-3%, focusing on rural and semi-urban infrastructure.
• Health Insurance: Reduce GST on premiums from 18% and raise the Section 80D deduction limit.
• Customs & Tax Benefits: Lower customs duties on life-saving drugs and raise preventive health check-up exemptions from Rs 5,000 to Rs 10,000.
• PRIP: Increase allocation to the Promotion of Research & Innovation Programme (PRIP) scheme. 

These measures could boost companies like Sun Pharma, Cipla, Lupin, Dr. Reddy’s, Apollo Hospitals, Fortis Healthcare and KIMS.

8. Consumption

The consumption sector could get a lift if the Budget introduces measures like income tax relief, rural development programs, or incentives for consumer durables and FMCG. 

These steps would increase disposable income, benefiting companies such as HUL, Godrej Consumer, Tata Consumer, and Dabur.  

Additionally, it could positively impact auto stocks like M&M, Hero Motocorp, Escorts, and VST Tillers.

9. Agriculture & Fertilisers

With the NDA’s reduced majority in 2024, rural welfare spending could increase, including higher allocations to the PM-Kisan Samman Nidhi Yojana and MSME support schemes. 

Farmers are advocating for a hike in the Kisan Credit Card loan limit (currently Rs 3 lakh), alongside demands for doubling PM-Kisan support, revising the MSP regime, cheaper long-term credit, and GST removal on agri-inputs.

Increased fertiliser subsidies could drive stocks like Chambal Fertilisers, FACT, GNFC, GSFC, and Paradeep Phosphates.

10. Telecom

The telecom industry has advocated for the abolition of levies and the extension of carry-forward business losses to 16 years.

Additionally, the sector is expected to benefit from a potential partial waiver of AGR dues, which could significantly reduce liabilities for major players like Bharti Airtel and Vodafone Idea.

Conclusion: Key Takeaways for Investors

This is a critical time to align portfolios with anticipated policy shifts. Positioning your investments strategically can help capitalize on the opportunities ahead.

• Growth Sectors to Watch: Focus on sectors like infrastructure, renewable energy, defence, railway and healthcare, which are poised to benefit from increased allocations and reforms.
• Stock Opportunities: Keep an eye on companies likely to gain from sector-specific policies and reforms.
• Tax Policy Impacts: Monitor changes in personal income tax and LTCG, as these will directly influence market trends and investor sentiment.

As Budget 2025 approaches, a pro-growth stance with strategic capital expenditure could uplift market sentiment. Key areas like agriculture and fintech may also see targeted focus. However, any tilt toward excessive social spending at the expense of growth could dampen market enthusiasm.

Union Budget 2025-26: Where to Watch

The budget speech will be aired live on the official channels of Parliament, Sansad TV and Doordarshan, and on their respective YouTube channels. Additionally, the Union Budget Web Portal, available in both English and Hindi, offers digital access to the Budget 2025 documents, including the annual financial statement, demand for grants, and finance bills as required by the Constitution.

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