‘The markets did not rise because …’: founder of Wisdom Hatch as the markets shrink from budget tax cuts

Despite the 2025-26 Union budget announcing an important fiscal relief for the middle class, the markets closed flat, which caused acute reactions of analysts, including the founder of Wisdom Hatch, Akshat Shrivastava.

In his evaluation, Shrivastava did not put words: “The markets did not increase despite the tax cut advertisement. Because? This particular tax cut is a popularity movement, not a sensible economic movement. This does not solve the growth problem; Simply solve the popularity problem. “

The budget of the Minister of Finance, Nirmala Sitharaman, exempt the annual income from up to RS 12 LAKH of the Income Tax under the new regime, together with rejigating tax slabs to provide relief to the middle class.

While the announcement was expected to boost the feeling of investors, the market reaction was warm: Sensex rose only 5 points to 77,506, while Nifty fell 26 points to 23,482.

Shrivastava argued that tax reduction, although shocking for people, lacks depth to influence the broader economic growth or investor confidence. “It gives the feeling that at least” something “is being done for the middle class,” he said, suggesting that the measure is more symbolic than strategic.

Breaking down the numbers, Shrivastava highlighted a key issue with the fiscal structure of India. He pointed out that approximately 6.5% of the country’s population presents income tax statements, but only about 2% of the population actually ends up paying income tax. With the new tax cuts announced in the 2025-26 budget, this number is expected to decrease even more, leaving only 1% of the population that effectively pays taxes.

“This does not build any kind of trust in investors,” he added, which implies that the tax base that was reduced could raise fiscal challenges while recently to stimulate long -term economic growth.

Market experts echoed similar feelings. Vinod Nair, head of research of Geojit Financial Services, said that the response of the mixed market was due to a modest annual increase in capital spending for fiscal year 26, without expectations, especially in sectors such as railways, defense and defense infrastructure. “The consumption -based sectors, which are expected to benefit more, had a low effect on the broad market due to their modest market mixing position,” Nair explained.

Meanwhile, Ajit Mishra, Senior Vice President of Research from Religare Broking, suggested that, although the impact of the budget could persist, the markets are likely to remain in reach as the participants expect clearer signals. “The ingenious can remain around their current levels as market participants expect the next decisive movement,” he said, pointing out the technical resistance near the level of 22,620.