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Budget 2025: Enhanced allocation, scope of PLI will bring these sectors, stocks in limelight

While Budget 2025 is expected to bring refinements that could further elevate certain industries, a critical shift in the government’s approach to the PLI scheme is also under consideration.

January 31, 2025 / 17:43 IST
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Budget 2025: Enhanced allocation, scope of PLI will bring these sectors, stocks in limelight

As the Union Budget 2025 approaches, investors and industry experts are hoping that the government would enhance the allocation and even the scope in terms of sectors supported through the Production-Linked Incentive (PLI) scheme.

A recent note by ICRA highlighted that the government may increase the allocation for the PLI scheme in FY26, with potential extensions to other labour-intensive sectors to boost domestic manufacturing and address credit flow issues.

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Data shows that the fund utilisation was less than 10 percent of the Rs 1.97 lakh crore that has been allocated since inception until the end of CY24. This is pushing the ministries to focus on more targeted interventions based on market demand, rather than applying the same PLI framework across all sectors.

Meanwhile, the upcoming Budget is expected to prioritise fiscal stability and tax reforms while spurring private investments with a recent note by HDFC Securities stating that domestic cyclicals are likely to make a comeback in 2HCY25. The broking firm considers financials, consumer discretionary and healthcare to be among the favourable sectors. Nifty has tumbled 9% in the past four months and investors will be looking for positive cues from Budget 2025.