💰️ Union Budget 2025

Good morning. It’s a great day today - let’s go after it 💪 

- Ruchirr Sharma & Shatakshi Sharmaa  

TABLE OF CONTENTS

• 💰️ Union Budget 2025

• 🤖 DeepSeek shakes Silicon Valley

• 🗞️ Bite-sized summaries

  • 🧑‍⚖️ SEBI denies expedition

  • 🛫 China to India back in the air

• 🧑‍🍳 What else is cookin’?

• 🍿 Entertainment, Entertainment, Entertainment

MARKETS

🇮🇳 India

• Indian markets extended losses amid weak corporate earnings, US trade concerns, and foreign fund outflows. Sensex dropped over 700 points, trading at 75,467, while Nifty fell below 23,000. Major laggards included Zomato, Reliance, and HDFC Bank, while ICICI Bank and Hindustan Unilever gained. Global markets showed mixed trends, and oil prices declined.

🇮🇳 International

• The Nasdaq and S&P 500 fell sharply as China's DeepSeek AI model challenged Big Tech dominance. Nvidia dropped 15.1%, and AI-related stocks slumped amid fears of declining GPU demand. Microsoft, Alphabet, and AI server makers saw losses, while AT&T rose on strong subscriber growth. Wall Street's "fear gauge" hit a one-month high.

BUDGET

💰️ Union Budget 2025

The Indian government is set to maintain its fiscal discipline despite a slowing economy, according to a Reuters poll of economists.

What does this mean?

• The upcoming Union Budget will likely adhere to a fiscal deficit target of 4.5% of GDP, slightly tighter than last year’s 4.8%.

• With public debt at 80% of GDP, significantly above emerging market averages, fiscal flexibility is limited.

• Economists suggest that much of the responsibility for supporting growth will rest on the Reserve Bank of India (RBI).

Economic growth slowed to 5.4% in the July-September quarter, down from over 8% last fiscal year, reflecting challenges in sustaining private investment and creating well-paying jobs. Consumer spending, which accounts for 60% of GDP, remains sluggish, with weak sales across multiple sectors.

To stimulate growth, experts expect the government to focus on key areas like agriculture, which employs nearly half the workforce, and potentially introduce income tax cuts.

However, these cuts may have limited impact, as only a small portion of the population pays income taxes. Broader measures, such as reducing energy taxes, could positively affect both households and businesses.

The government is also anticipated to allocate ₹11.25 trillion for capital expenditure, or 3.2% of GDP, continuing its emphasis on infrastructure development. Since 2014, significant efforts have been made to reduce corporate tax rates, incentivize manufacturing, and expand infrastructure spending.

Overall: The RBI is expected to play a crucial role, with a likely rate cut of 25 basis points in February to address the economic slowdown. However, inflation concerns and rupee depreciation may limit the central bank's ability to implement further reductions.

As India navigates these challenges, the budget’s focus on balancing fiscal responsibility with growth-driven initiatives will be pivotal for long-term economic stability.

Read more: Economic Times

ARTIFICIAL INTELLIGENCE

🤖 DeepSeek shakes Silicon Valley

Chinese AI startup DeepSeek has sent ripples through Silicon Valley, positioning itself as a significant competitor in the artificial intelligence race. Its latest innovation, the DeepSeek R1 large language model (LLM), matches or surpasses OpenAI's O1 model in mathematical ability and coding proficiency. Remarkably, this achievement came with an investment of just $6 million—a fraction of what its Western counterparts have spent.

Industry leaders are taking notice. Perplexity AI CEO Aravind Srinivas praised DeepSeek's V3 model for replicating OpenAI’s O1-mini and open-sourcing it. Microsoft CEO Satya Nadella called for serious attention to DeepSeek’s emergence. Venture capitalist Marc Andreessen likened the development to “AI’s Sputnik moment,” highlighting its potential to reshape the AI landscape.

DeepSeek’s open-source approach has sparked both admiration and skepticism. Meta’s Chief AI Scientist Yann LeCun commended the model as a testament to the power of open research and collaboration, citing its reliance on open-source frameworks like PyTorch. However, critics like Neal Khosla, CEO of Curai, allege ulterior motives, labeling DeepSeek as a tool for economic warfare. Khosla claimed the startup’s low-cost model might undermine U.S. AI competitiveness—a charge unsupported by evidence, according to community notes on X (formerly Twitter).

This breakthrough has reignited debates on innovation, competition, and geopolitics in AI. Scale AI CEO Alexandr Wang emphasized the need for the U.S. to “out-innovate and race faster” while tightening export controls on critical technologies. Meanwhile, the open-source nature of DeepSeek’s advancements may democratize AI capabilities, leveling the playing field globally.

As DeepSeek rises, its impact on the global AI ecosystem is undeniable. Whether it’s a wake-up call for U.S. innovators or a step forward for open research, this is a moment for the AI world to watch closely.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

🧑‍⚖️ SEBI denies expedition - The Supreme Court dismissed a plea for expedited completion of SEBI’s investigation into Hindenburg Research's allegations against the Adani Group, citing the adequacy of SEBI regulations and progress in the probe, with 20 of 22 investigations completed. The court upheld a registrar's order rejecting petitioner Vishal Tiwari’s request for a status report on recommendations by the SC-appointed Justice Sapre panel. The court reaffirmed its 2023 stance, finding no regulatory failure by SEBI and declining requests to transfer the probe to a special team or CBI. Allegations of conflicts of interest in SEBI’s investigation were also deemed baseless.

🛫 China to India back in the air - India and China have agreed to resume direct flights after a five-year hiatus due to the pandemic and political tensions. The decision, announced after Foreign Secretary Vikram Misri visited Beijing, includes plans to enhance people-to-people exchanges, such as media and think-tank interactions. Both nations will finalize the framework for flight resumption soon. Additionally, they agreed to restart the Kailash Mansarovar Yatra in the summer of 2025. These developments follow discussions between Prime Minister Narendra Modi and President Xi Jinping in October 2024, aimed at rebuilding trust and strengthening bilateral relations through cooperative measures and resolving longstanding issues.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

• Modi govt said to ditch privatisation plans, pour billions in state-run firms.

• Highway development gave a boost to economic growth.

• India secures over ₹20 lakh crore investments at WEF Davos: Industry leaders emphasise the importance of sunrise industries.

• Tesla, BMW take EU to court over China EV tariffs.

• Trump to order end to DEI in military, reinstate troops who refused COVID vaccines, Hegseth says.

CULTURE

🍿 Entertainment, Entertainment, Entertainment

• Australian Open 2025 ends with a bang, with Jannik Sinner winning the Men’s Championship, and Madison Keys taking the Women’s Championship.

• Akshay Kumar's film let’s "numbers do the talking", crosses Rs 60 Cr mark.

• Accel’s Prashanth Prakash & Pentium Father Vinod Dham among 2025 Padma Awardees.