Budget could disappoint Dalal Street, Jefferies says in note. Here's the reason why

Nirmala Sitharaman's Budget won't move the bourses, said Jefferies in note, suggesting that  India’s FY25 budget could show reduced growth in capital expenditure compared to previous years, potentially causing disappointment in Dalal Street.

Jefferies noted slowdown in capex growth is perceived as a potential market “disappointment,” with investors reacting negatively due to their expectations for ongoing infrastructural and economic expansion.

The global financial services firm sees diminished growth in capital expenditure in the FY25 budget that could lead to trimmed allocations for infrastructure development, public projects, and sector investments.

ET in recent report said Centre may limit the increase in its "overall spending to around 10% in
the interim budget for FY25, from the budget estimate for this year, with an aim to balance the need for sustained growth with fiscal consolidation imperatives".

According to the first advance estimate, India's gross domestic product (GDP) is forecast
to grow 7.3% in FY24, bettering the preceding fiscal year's 7.2%. FY24's budget had raised spending by 14.1% over the FY23 budget estimate - to ₹45 lakh crore. FY24 expenditure growth was up 7.5% over the provisional number for the last fiscal year.