The Budget 2022 may not have had direct measures to boost consumption or offered a tax rebate to the salaried class, economists believe the fun push for the PM housing scheme and a capex allocation of Rs 7.5 trillion will boost consumption.
“Prima facie, there is no direct allocation to spur the consumption and the government did not introduce any tax rebates to the consumers. However, given the allocations under PM Housing Scheme and capex allocation of Rs 7.5 trillion, we expect a boost in the consumption,” said Kavita Chacko, Senior Economist, CARE Ratings.
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Finance Minister Nirmala Sitharaman presented the Budget for the year 2022-23 in the Lok Sabha on February 1, blending the welfare needs with reformist intent. The Budget went big on infrastructure and digital push even as Nirmala Sitharaman pegged the fiscal deficit for the financial year 2022-23 at 6.4 percent of gross domestic product (GDP).
Also read: Budget 2022: Affordable housing gets major boost
Analysts, too, believe that announcements such as procurement of wheat and paddy from farmers, domestic production of oil seeds are a positive for the consumer goods companies.
Also read: Budget 2022 disappoints salaried, middle class, says Congress as more reactions pour in
“Procurement of wheat in rabi season and paddy in Kharif season will cover 120.8 million metric tonnes of wheat and paddy from 16.3 million farmers and Rs 2,370 billion will be the direct payment of MSP value to their accounts. This is mildly positive for consumer companies,” said Abneesh Roy, executive director of institutional equities at Edelweiss Securities.
Support for millets and setting up of a fund by NABARD to support agro and farm start-ups are other announcements that could help consumer goods companies.
Also read: Budget 2022: FM announces Kisan drones, digitisation of land records to boost farm sector
The allocation of Rs 480 billion under the PM Housing scheme will help real estate companies and hence is in favour of paint and adhesives players, said Roy.
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