Despite the budget of the Union 2025-26 announcing significant tax relief for the middle class, the markets have closed flat, which caused analysts’ reactions, in particular the founder of Wisdom Hatch, Akshat Shrivastava.
In his evaluation, Shrivastava did not mock the words: “The markets did not increase despite the announcement of the tax reduction. For what? This particular tax reduction is a popularity decision, not a judicious economic decision. This does not solve the growth problem; This simply solves the problem of popularity. »»
The budget of the Minister of Finance Nirmala Sitharaman exempt the annual income of up to Rs 12 Lakh of income tax within the framework of the new regime, as well as the rejigment of the taxes to relieve the middle class.
Although the announcement was to increase the feeling of investors, the market reaction was lukewarm – Sensex increased only from 5 points to 77,506, while Nifty slipped 26 points to 23,482.
Shrivastava argued that the tax reduction, although impactful for individuals, has no depth to influence broader economic growth or investors’ confidence. “It gives the feeling that at least” something “is done for the middle class,” he said, suggesting that this decision is more symbolic than strategic.
By breaking down the figures, Shrivastava highlighted a key problem with the tax structure of India. He pointed out that around 6.5% of the country’s population produces income statements, but only about 2% of the population ends up paying income tax. With the new tax reductions announced in the 2025-26 budget, this number should drop even more, leaving only 1% of the population effectively paying taxes.
“This does not strengthen any confidence of investors,” he added, which implies that the narrowed tax base could pose tax challenges while doing little to stimulate long-term economic growth.
Market experts have echoed similar feelings. Vinod Nair, research manager at Geojit Financial Services, noted that the mixed response on the market was due to a modest increase of 10% in annual sliding of capital expenses for financial year 26 – not marking expectations, in Particular in sectors such as railways, defense and infrastructure. “The consumer -based sectors, which should benefit the most, have had a low effect on the wide market due to their position of modest market mixture,” said Nair.
Meanwhile, Ajit Mishra, the main research vice-president at Religare Broking, suggested that if the impact of the budget could persist, the markets are likely to remain linked to the beach because participants expect clearer signals. “The NIFTY can stay around its current levels while market players are waiting for the next decisive decision,” he said, pointing to technical resistance near the level of 22,620.
