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The lack of focus on the struggling consumption sector and faltering private sector job growth is likely to disappoint the markets, potentially leading to underperformance in consumption-related sectors, says Jitendra Gohil, Chief Investment Strategist, Kotak Alternate Asset Managers Limited.

"We maintain our cautious stance on these sectors," he said.

The fiscally prudent budget should support Public Sector Unit (PSU) valuations, and we maintain our positive view on PSU banks in particular. Infrastructure-related stocks within the domestic economy could see a boost from increased spending, although their valuations appear stretched in some areas.

This budget might nudge the RBI to ease current tight liquidity conditions, which, coupled with falling yields, would benefit interest-sensitive sectors like NBFCs and real estate, he said.

Motilal Oswal, MD & CEO, Motilal Oswal Financial Services said what is a bit of a dampener, however is lack of any big push for consumption. Consumption has been weak, especially in Rural India, as indicated by corporate earnings for last few quarters.

The budget does not provide any near-term solution for quick revival for consumption.

Suman Chowdhury, Chief Economist and Head – Research, Acuite Ratings & Research said notwithstanding the robust economic growth in FY23 and FY24, there is still a fragility in private consumption with only a modest 4.4 per cent growth estimated by NSO in the current year.

The data on FMCG volumes suggest that rural demand has been the key factor constraining the overall demand. The government was expected to enhance the allocation on MNREGA which was earlier set at Rs 60,000 crore for FY24 and it is now pegged at Rs 86,000 crore, importantly, the same allocation has been retained for MNREGA in the next fiscal.