News Nook: Feb 2, 2025

Indian Sector Specific News:

A) BFSI:

1) 100% FDI Allowed in Insurance Sector

• The government has raised the foreign investment limit in insurance from 74% to 100%, but companies must invest all their premium income within India.
• A new Insurance Amendment Bill, which would allow global insurers to operate independently and agents to sell policies from multiple companies, was delayed in Parliament.
• Source: Economic Times

2) Banking & Credit Sector Boost

• The government will provide more loans and credit support to small businesses, farmers, and homebuyers, including a ₹15,000 crore fund to complete stalled housing projects.
• Foreign investment in insurance is now allowed up to 100%, and MSMEs will get higher loan limits and easier access to credit.
• Source: CNBC TV18

3) SEBI Cracks Down on Finfluencers

• SEBI has banned financial influencers from using live stock prices and giving buy/sell advice to prevent misleading investment recommendations.
• Unregistered advisors must now use stock price data at least three months old, and SEBI-registered firms can no longer collaborate with finfluencers.
• Source: Investing.com

4) SEBI Plans Safe UPI Payment Mechanism

• SEBI proposes a unique UPI ID for registered market intermediaries and a green "thumbs-up" icon to help investors avoid fraud.
• The daily UPI transaction limit for capital markets may increase from ₹2 lakh to ₹5 lakh, pending review with NPCI.
• Source: Moneycontrol

B) Automobile:

1) Auto Industry Hails Budget 2025-26 for Growth Boost

• ACMA and FADA welcome increased tax exemptions, EV incentives, and rural focus, predicting higher vehicle demand.
• Budget initiatives like credit guarantee expansion, customs duty relief for EVs, and rural schemes expected to drive auto sector growth.
• Source: Autocar Pro

2) Budget 2025: Impact on Indian Auto Sector

• Raised income tax exemption to ₹12 lakh expected to boost vehicle demand, especially for middle-class buyers.
• Customs duty cuts on 35 EV battery components and ₹2,819 crore PLI allocation to support electric mobility and local manufacturing.
• Source: CarDekho

C) Telecommunication:

1) Telecom Stocks Rise After ₹95,298 Cr Budget Boost

• Govt allocated ₹95,298 crore to telecom & cut import tax on Ethernet switches, helping the sector.
• Stocks like Vodafone Idea (+10%), HFCL (+9%), Indus Towers (+5.5%), and Bharti Hexacom (+3.4%) surged.
• Source: Trade Brains

D) Pharma:

1) Pharma Industry Welcomes Budget 2025 Exemptions on Essential Drugs

• India Pharmaceutical Alliance appreciates tax exemptions and concessions on essential medicines in Budget 2025, supporting affordability and accessibility.
• The industry expects these measures to boost domestic production and strengthen India's healthcare sector.
• Source: ANI News

E) Agriculture:

1) Agri Stocks Surge as Budget 2025 Announces Farmer-Friendly Reforms

• Agriculture stocks rose up to 9% after the Budget allocated ₹1.71 lakh crore for the sector, launched a six-year pulses self-reliance mission, and increased Kisan credit card loan limits to ₹5 lakh.
• Additional initiatives include the Dhan Dhanya Yojana, a makhana board in Bihar, and a five-year cotton mission to boost production and rural consumption.
• Source: Moneycontrol

F) Energy:

1) Power Sector PSUs' Investment to Rise 21% in FY26

• The government plans to increase investment by nine state-owned power firms by 21% to ₹86,138 crore in FY26, with NTPC's allocation rising to ₹26,000 crore and Power Grid Corp’s to ₹25,000 crore.
• Other key allocations include ₹13,000 crore for NHPC and ₹12,000 crore for SJVN, reflecting a strong push for power sector expansion.
• Source: Economic Times

2) Budget 2025: ₹5,876 Crore Allocated for Oil Reserves, LPG Subsidy Cut

• The government allocated ₹5,876 crore for India's strategic oil reserves, ensuring energy security, while reducing LPG subsidies.
• The subsidy cut aligns with fiscal consolidation efforts, impacting households relying on subsidized LPG.
• Source: ET Energy

3) Budget 2025: Indian Oil, BPCL, HPCL Shares Fall as LPG Compensation Remains Uncertain

• Shares of Indian Oil, BPCL, and HPCL dropped 2-4% after the budget failed to allocate expected compensation for LPG sales below market rates.
• These companies incurred a combined loss of ₹29,152 crore in nine months, while the government allocated ₹1,500 crore for Ujjwala gas subsidies and ₹9,100 crore for new Ujjwala connections.
• Source: Economic Times

G) IT:

1) IT Industry Applauds Budget 2025 for AI Skilling, Make-in-India, and Tax Relief

• Industry leaders welcomed the Budget’s focus on AI skilling, local manufacturing, and tax relief measures. Key initiatives include Centres of Excellence for AI, a National Manufacturing Mission, and reduced import duties to boost growth.
• Microsoft pledged to train 10 million people in AI by 2030, while Tata Technologies highlighted the budget’s role in enhancing India's self-reliance in manufacturing and workforce skilling.
• Source: TOI 

H) Infrastructure:

1) Real Estate Industry Gains in Budget 2025

• The real estate sector welcomed the budget with provisions aimed at easing the cost of housing, including measures for affordable housing and a focus on urban infrastructure development.
• Specific incentives for the sector include tax reliefs and policy support to further strengthen its growth.
• Source: Economic Times

I) FMCG:

1) Tax Gains Likely to Boost Consumption; Realty, FMCG, and Consumer Durables Indices Surge

• The income tax cuts in Budget 2025 have spurred a rally in stocks of consumption companies, particularly benefiting the Realty, FMCG, and Consumer Durables sectors, which saw significant gains.
• Nifty's Realty index surged 3.4%, while FMCG and Consumer Durables indices gained around 3% each. However, some experts remain cautious, doubting whether the tax cuts will effectively boost consumption.
• Source: Economic Times

Indian Economy and Government Initiatives:

• Government's 2025-26 expenditure set at ₹50.65 lakh crore, with a fiscal deficit target of 4.4% of GDP; key measures include FDI limit increase in insurance, credit access improvements for MSMEs, and a Maritime Development Fund with ₹25,000 crore.
• Initiatives for infrastructure, energy, agriculture, education, and labor include ₹1 lakh crore Urban Challenge Fund, a Nuclear Energy Mission with ₹20,000 crore, self-reliance mission for pulses, and 10,000 new medical college seats.
• Budget 2025 proposes tax concessions and exemptions for life insurance policies in IFSC offices until March 2030, aiming to boost investment and strengthen India's financial infrastructure.
• Finance Minister Nirmala Sitharaman set the fiscal deficit target for FY26 at 4.4%, aiming to reduce the budget gap below 4.5% by 2026, despite concerns over economic growth.