MUMBAI It’s not wise to define the term ‘Animal Spirits’ unilaterally as it’s one of the most misunderstood expressions in recent memory. India is a wonderful economy, and we, certainly, are not in deeply troubled times.
Our markets are resilient, and there is an element of ‘animal spirits’ in all sectors of the economy, including the stock market, but the magnitude varies according to the economic policies of a nation. Animal Spirits—the breath that awakens human mind in times of economic uncertainty—is a reality today.
Animal Spirits Cannot Be Cultivated
The overall market fundamentals are encouraging. Indeed, we need to speed up market reforms, and ‘animal spirits’ cannot be cultivated artificially as it is a psychological phenomenon. Thanks to Economist John Keynes as he coined the term to visualise emotional factors that influence investors in the decision-making process, including buying and selling of securities.
The domestic economy has been benefiting from economic reforms since early 1990s in one way or the other. But, these days, all discussions on the economy and stock markets give too much weight to unrealistic analysis. Information dissemination needs a practical, and well-balanced approach.
Often, they conclude with misinformation or disinformation, and the result is an unexpected and extensive decline in investor-confidence. Undoubtedly, the market enjoys the expertise and charisma of a few public and private sector institutions.
In fact, the main concern has been a synchronised slowdown in investor confidence since the beginning of the year. But post-budget, we will cherish the good news, because we haven’t had much of it lately.

Though the budget is expected to be cautious, it may also consider the common man. As we all know, in a world of more wars, our defense expenditure will keep rising in this budget as well. |
The bottom line is nothing but the policymakers need to relearn how to work together and boost investor-confidence. This exemplifies that we need more room for expanding capital markets and the economy.
For market prosperity—ultimately the investor-confidence—policymakers and business community can do better: let there be constructive discussions on economic policies. Let’s see policymakers synchronise their actions, and let investors efficiently and confidently pool resources.
In general, business leaders, stockbrokers, and investors believe, the Union Budget for 2025-26 will not pour cold water on an already lukewarm market, and the thirst is for renewed and fresh investor-friendly policies. However, don’t expect any trump parties immediately—until the investor community totally understands the Union Budget, and read it intelligently.
India's Resilience
Is there a slowdown in India’s USD 4 trillion economy? Not really. The IMF forecasts India’s growth to remain robust at 6.5 per cent for both 2025 and 2026, aligning with October 2024 projections. The World Bank projects India’s economy to grow at a steady rate of 6.7 per cent during the same period, outpacing global and regional peers. Global growth is expected to remain comparatively lower at 2.7 per cent. This underlines India’s resilience and its growing significance in shaping the world’s economic landscape.

The IMF forecasts India’s growth to remain robust at 6.5 per cent for both 2025 and 2026, aligning with October 2024 projections. | File
Though the budget is expected to be cautious, it may also consider the common man. As we all know, in a world of more wars, our defense expenditure will keep rising in this budget as well.
The nation will enjoy an improved macro-economic environment if policymakers rightly examine the economics of 1.2 billion people, it’s nothing but the Big picture democracy. The truth is: animal spirits is here to stay as no close-match on stage.
India is a land of opportunities for all, but its vast potential still remains untapped. We need to consolidate the progress made so far and build on it.