● Budget: The FY26 budget pivoted to consumption from capex to provide a fillip to faltering domestic demand and boost economic growth without compromising on fiscal consolidation commitment. It put more money in the hands of people by realigning tax slabs (Rs. 1tn higher disposable income), increasing allocation for rural schemes and enhancing credit limit for KCC farmers from Rs. 300K to Rs. 500K (providing access to Rs. 3.3tn credit at 4% interest rate). This is expected to drive discretionary consumption in FY26.

● Strong GST collections continues: Goods and Services Tax (GST) collections in January’25 went up by 12.3% from the same period last year to INR1.96tn. This is the robust increase we have seen after 2 consecutive month of high single digit growth.

●Outlook: Weak demand environement continues to impact the earnings, further government capex slowdown, extended monsoon has impact the growth of India Inc. We expect consumption should start improving as people will have higher disposable income. We remain positive on Indian equities from long term prespective.