Budget 2013 thrust to be on investments, savings: Citi

Moneycontrol Bureau

Brokerage house Citi expects Union Budget 2013 to focus on investments and savings, rather than consumption, as has been mostly the case in the past. It is also confident that the Finance Minister will be able to achieve his stated targets on fiscal deficit—5.3 percent this year and 4.8 percent next year.

"We expect the market to focus on: (a) incentives for financial savings, including equity; b) roadmap or commitment on GST; c) legislative intent on land acquisition, sectoral FDI, insurance; d) infra and capital investments; e) bond markets; and f) execution commitments and initiatives," said the Citi note to clients.

"We expect FM to achieve his stated targets on fiscal deficit (5.3 percent for FY13/4.8 percent for FY14) with a mix of (a) controlled expenditure – plan and non-plan (primarily subsidies); (b) revenue boosters – higher tax through "surcharge" and some cut in pre-crisis sops; and (c) thrust on divestments/non-tax revenue sources," the note says.

Citi sees potential upsides for energy, real estate, banking, insurance/savings sectors and metals, and some downside risks for consumer and auto sectors.

"Budget will likely be biased towards investments and savings, rather than consumption," the note says.