India is likely to witness a $50 billion consumption and savings boost due to the wage revision for central government employees and pensioners in January 2026. Around 3.1 crore people are expected to benefit, with UBS predicting the hike to have a stable impact on India's fiscal position, favoring savings over consumption.
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Budget 2025 income tax expectations: The introduction of pre-filled Income Tax Returns (ITRs) has proven to be a significant advancement in streamlining the tax filing process. However, there is a strong need for further enhancement in data extraction.
In November, the RBI sold $20 billion from its forex reserves to stabilize the rupee. Nomura observes that the central bank has sold $89.4 billion since October 2024, yet India's forex reserves remain adequate with a 236% adequacy ratio as of January 3, 2025. Despite a dip from a peak of 266%, the reserves remain robust.
ICICI Bank reported a 15% rise in standalone net profit to Rs 11,792 crore for Q3 of FY2024, compared to Rs 10,272 crore in the same period last year. Total income rose to Rs 48,368 crore, with improved asset quality as gross NPAs dropped to 1.96%.
The 2020 tax deferment policy for ESOPs aims to address immediate tax liabilities and financial strain on startups. Despite its potential, applicability is limited to only 3,605 IMB-certified startups. NASSCOM recommends expanding eligibility to all DPIIT-recognized startups to attract talent and reduce employee attrition.
Outgoing RBI Governor Shaktikanta Das emphasized inflation control as the central bank's top priority. Das provided insights into the crucial challenges awaiting the central bank whilst expressing optimism about his successor's capabilities, as he reviewed his six-year leadership period.
Indian employees now prioritize workplace flexibility, job security, learning opportunities, and a sense of belonging over salary. Randstad India's Workmonitor 2025 survey reveals that 52% would leave jobs lacking flexibility. Job security, mental health support, and work-life balance are more significant than pay. Flexibility is a baseline expectation across all age groups, signaling a fundamental change for organizations.
A rally in tech stocks powered Wall Street gains in a quiet pre-Christmas session. Tesla led the megacaps, with Broadcom and AMD rising as Biden's team probed Chinese chips. Investors hope for the 'Santa Claus Rally' to boost year-end stocks further. The S&P 500 climbed 1.1%, Nasdaq 100 up 1.4%, and Dow Jones increased 0.9%.
Foreign portfolio investors continued their selling spree, withdrawing Rs 34,574 crore from Indian equities in February due to concerns over India's economic outlook and a strengthened US dollar. This persistent outflow has led to increased market volatility, with 2025 FPI equity sales reaching Rs 1,12,601 crore.
India maintains fiscal discipline despite challenges, with 2024-25 fiscal deficit target at 4.8% of GDP and a plan to reduce it to below 4.5% by 2025-26. The government aims to achieve a debt-to-GDP ratio of 50% by 2031 with focus on balancing development with fiscal prudence, resilient policies, and necessary fiscal buffers.
Goldman Sachs predicts a slowdown in government capex growth to 13% in the new fiscal year, down from 17% in FY24. The fiscal deficit is projected to narrow to 4.5% of GDP. The budget will likely focus on rural and welfare spending, job creation, and long-term economic policy towards 2047.