The Central government will announce the final union budget for FY25 on July 23. Here are three emerging themes likely to be in focus:
- Rural Revival: Leading brokerage houses expect a strong emphasis on the rural economy.
Goldman Sachs predicts the budget will aim to control food inflation and promote employment by focusing on ‘agri-infra’ projects. Potential policy initiatives include:
Cold storage facilities, efficient irrigation networks, grading and sorting units, and food processing.
Incentives to boost domestic production of edible oil, pulses, vegetables, fruits, and expansion of dairy cooperatives and fisheries.
Measures to reduce machinery input costs, increase seed availability, and allocate funds for price stabilization in vegetables and pulses.
Stocks to watch: Bajaj Auto, Nestle India, and HUDCO.
2. Support for MSMEs: Creating socio-economic growth and promoting employment will be key objectives in the upcoming budget. Given MSMEs' contribution of around 45 percent of exports and 40 percent of manufacturing GVA, the budget is likely to focus on this sector.
Measures could include: Boost to labour-intensive manufacturing and MSME credit
Continued emphasis on services exports through GCC expansion
Initiatives to enhance domestic food supply chain and inventory management to control price volatility.
Stocks to watch : Aegis Logistics, Veefin Solutions
3. Andhra Stocks: With the Finance Minister representing a coalition government for the first time under the BJP regime, investors should watch for:
Andhra stocks due to the increased influence of the Telugu Desam Party (TDP) at both the Centre and State levels.
Stocks to watch: Amara Raja Energy & Mobility, Heritage Foods, KNR Construction, and Avanti Feeds.
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