Most experts expect the government to tweak GST rates for infrastructure- related sectors including housing instead of major increase in spending.
The government always spends big chunk of money on infrastructure through various segments including railway, roads, construction, etc. Generally, the spending by the Centre during election year increases, which would be key thing to watch out for.
"Several measures have already been taken over the past 5 years to spur infra development and hence allocation for the same. We do not think there would be many announcements for the sector. However, reduction of GST on sale of under construction houses is on the expectation list of both the developers as well as home buyers," Ajay Jaiswal, President - Strategies & Head of Research at Stewart & Mackertich told Moneycontrol.
He said affordable housing has been given a huge focus during the entire term of the government and is expected to be expanded further during this Budget as well.
Additional income tax deductions for buyers of units falling under the definition of affordable housing can provide targeted support to this segment where affordability is the main constraint on demand, according to him.
Smart cities have been a flagship project of the government, aimed at improving the quality of living in urban areas, making them more sustainable.
"Effective implementation of these plans through adequate budgetary allocation, selection of the right agencies to execute the projects and regular monitoring of timely progress will be a key expectation from the government," Jaiswal said.
Focus on completion of infrastructure projects — be it roads, highways, smart cities, all of it shall overall benefit the industry.
"If at all there are measures to boost the infrastructure sector further, we may see renewed interest in infrastructure ancillaries and aggregate companies," he said, adding L&T would remain the top pick.
Experts suggest that India requires an investment of Rs 50 lakh crore in infrastructure by 2022. Even now only 24 percent of the national highway network in India is four-lane.
Infrastructure sector also is the 2nd largest employer in India after agriculture. Construction Output in India averaged 4.79 percent from 2005 until 2018, reaching an all-time high of 11.66 percent in January of 2010 and a record low of -1 percent in October of 2013.
Hence, apart from roads, railways are another theme waiting to see a change in fortune, Shailendra Kumar, Director & CIO at Narnolia Financial Advisors said.Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.