In the last 3 years investors have made a lot of money in markets especially in cyclical, policy dependent and macro driven sectors like PSUs, Defence, Railways, Infrastructure, Energy, Utilities, Capital Goods etc.

Before the budget came the following sectors down by 30% from their peaks and market was already rotating in favour of laggards of recent times like financials, IT, healthcare, chemicals etc.

There have been concerns now for some time on slowing urban consumption. Zero Tax for the Salaried upto 12 Lakhs and the announcement of 8th Pay Commission and now leaving more money in the pockets of taxpayers all points towards prioritization of consumption part of the economy in the next year or two.

This tax cuts from budget 2025 will trigger consumption from Middle Class and 8th Pay commission increments will trigger Consumer Durable Consumption in India for 2025 and 2026

This tax cut, will put 1 lakh crore in the hands of Middle Class and reports suggests that 80% of this money will be spent on Consumption.

This means this is the best time for even lumpsum payments in to Mutual funds for long term Investing with diversifying appropriately. Most importantly, investing only those funds that won’t be needed for several years (At least 5 year).

Happy Investing!