The upcoming Union Budget 2024 is expected to be pro-growth but not a populist one, according to economists at brokerage firm Anand Rathi. With focus on boosting growth and stability through continuing emphasis on infrastructure and consumption inducing measures, economists expect the budget 2024 to be positive for the Indian stock market.
Consumer, infrastructure and capital goods sectors are expected to be the main beneficiaries in the Budget 2024.
“Despite the likely acceleration of revenue spending and the continued high growth in public capex, with favourable receipts, fiscal consolidation is likely to continue. We expect the FY25 fiscal deficit to be 5% of GDP. There is little reason to expect a populist budget,” Anand Rathi said in a report.
With the BJP winning fewer than expected seats in the Lok Sabha elections 2024, it is being argued that the coming budget would be a ‘populist’ one with many welfare schemes.
Yet, poverty has actually fallen steeply and, in the last ten years, low to middle income mobility has been widespread. Therefore, both the interpretation of the election outcome and possible corrective action seem erroneous. We do not expect the budget to be a populist one,” the brokerage report said.
It expects agriculture and the rural economy to receive significant attention with a road-map for agriculture reforms including agricultural marketing, infrastructure creation, technology for greater productivity and stability, remunerative farm product pricing, affordable agricultural input costs and rural job creation.
Here are budget expectations for various sectors and segments:
Infrastructure: Continuation of huge allocations for public investment in infrastructure with specific focus on renewable energy, CGD and water.
Manufacturing: Widening the Production-linked Incentive (PLI) scheme, including for the MSME segment. Improvement in conditions for doing business is expected.
Agriculture: Increased budget allocation for agri or rural infrastructure, and for Kissan Samman Nidhi and higher credit flows to agriculture are also expected. For the rural economy, the brokerage firm expects increased allocation for rural infra including roads, greater subsidies for rural housing and spreading financial inclusion through digital banking.
Employment: Expect employment-linked incentive scheme, PLI benefit for the Services sector, implementation of new education policy for job-oriented skill creation.
Taxation: Raising exemption limit and standard deduction for income tax, rationalising capital gains tax and decriminalizing certain tax offenses are expected in the budget 2024.
Here are top budget picks by Anand Rathi in different sectors:
Auto: TVS Motor Company, Ashok Leyland
Capital Goods: ABB India, Siemens, Cummins India
Consumer durables: Amber Enterprises, Crompton Greaves Consumer Electricals, Finolex Cables
Cement: Ultratech Cement, Sagar Cements
Infrastructure: NCC, PNC Infratech, HG Infra Engineering
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
