Understanding the Budget and its impact

The market expects the capex cycle to have peaked, with a new consumption cycle emerging. Prashant Jain praised the Budget, which balanced fiscal consolidation and bolstered weak consumption. The government’s capex share has grown significantly since the Covid period. Going forward, Jain anticipates government capex will grow in line with nominal GDP. While government steps will positively impact consumption, he remains cautious on consumer staples due to high valuations. Discretionary goods, however, could benefit from a consumption boost.