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The Budget’s focus on boosting both consumption and capex is supportive for Indian equities, especially for healthcare, financials and consumer-related sectors
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Budget for FY26 tries to offset a decline in expenditure as a share of GDP by focussing on quality of spending and deficits. However, the path of fiscal consolidation outlined in terms of debt-to-GDP ratio will not be easy
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The economy will benefit from liquidity support by way of monetary expansion, considering that India’s money supply which grew at 17 per cent a few years ago, is now at around 10 per cent. Monetary reflation could manifest via a combination of rate cuts and/or liquidity injection
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Data shows 88 percent of salaried tax payers earn less than Rs 15 lakh a year and contribute a mere 20 percent of tax collections. Lifting the tax threshold to Rs 15 lakh and levying a tax of 25 percent and 30 percent on the next two slabs can release up to Rs 2.4 lakh crore into the hands of salaried taxpayers. A lot of this tax relief will be recouped by the government in the form of GST accruing from higher consumption. It’s a win-win idea.
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Capex has perhaps peaked in this budget, but the thrust on employment has the potential for a jobs-linked incentive scheme
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This year's Union Budget focused on the growth of the informal sector; from skill enhancement for youth, credit flow to MSMEs, to income enhancement measures for the rural sector. Here's what the budget had to offer the financial sector
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In the Union Budget 2024, Finance Minister Nirmala Sitharaman has reduced the fiscal deficit target to 4.9 percent of the GDP for 2024-25, from the target of 5.1 percent pegged in the interim Budget.
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In the interim budget, the government had targeted a fiscal deficit of 5.1 percent of the GDP for 2024-25.
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The Union Budget may build on the vision for a long-term policy towards 2047, with focus on jobs and reining in inflation, said a Goldman Sachs note.
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In the interim budget, the government had targeted a fiscal deficit of 5.1 percent of the GDP for 2024-25.
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The Budget is expected to be presented in the third week of July, and it is learnt that NDA 3.0 may give more teeth to certain schemes that support welfarism, while sticking to fiscal prudence.
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Fiscal consolidation to continue though there could be a shift in the expenditure pattern
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FM’s reiteration of commitment to focus areas such as rooftop solars, affordable housing, green energy, EV transition, metros, railways did not cause an upswing in these stocks only meant that capex spending has already been priced in.
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Policy rate cuts by global central banks seem visible over the medium term and well-managed duration funds like Dynamic bond funds, Banking & PSU debt funds can benefit
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What deserves credit is that despite delivering the customary pre-election sops, the budget exercised restraint and did not lose sight of long-term value creation
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The interim budget has used a positive economic backdrop to strengthen the long-term growth impulses provided by public investments, build back fiscal buffers to counter future shocks and aims to put public debt on a downward path to free up space for productive spending
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The Budget decisions will help in the development of advanced 21st-century infrastructure and also lead to the generation of ‘countless’ new employment opportunities
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A Moneycontrol poll of economists had shown that the finance minister may target a fiscal deficit of 5.3 percent of the GDP for 2024-25 in its interim budget.
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For fiscal consolidation, the government will need to reduce its capital expenditure at a time when private capex is just starting to improve. Curbing capex poses a risk to growth and the interim budget must indicate a balance
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The economists estimate that the government will try to consolidate the fiscal deficit to 5.2-5.4 percent of GDP in FY25.
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The government faces an increase in the subsidy bill, including free food grain and LPG schemes due to volatile prices.
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The budget stayed the course on fiscal consolidation, but has also allocated funds wisely to important schemes
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With RBI projecting an inflation of 5 percent in June 2023, the probability of the 10-year government bond yield heading lower exists
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But the elevated borrowing level may exert upward pressure on sovereign yields, against a backdrop of rising demand for bank credit
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During the address, Finance Minister Nirmala Sitharaman would be highlighting the key points of the 2023 Union Budget, including the fiscal consolidation roadmap and high capital expenditure plan
