The government has increased capital expenditure by 33% to Rs 10 trillion. Which will enable the country to expand its network of roads, ports and airports.
Prime Minister Narendra Modi’s government on Wednesday presented a budget. That laid out several measures to boost infrastructure to create more jobs. And attract investment ahead of crucial national elections next year.
With a year to go for national elections, tackling the issues of high unemployment. And inflation is crucial for Prime Minister Modi as he looks to win a third consecutive term. Finance Minister Nirmala Sitharaman focused on farmers. Backward castes and women to tackle inequality exacerbated by the pandemic.
The government has increased capital spending by 33%. To 10 trillion rupees ($122 billion). That will enable the country to expand its network of roads, ports. And airports and make it an attractive destination for investors.
The government increased spending on the farm sector. Which accounts for about 19% of the economy. The budget proposes spending 22 billion rupees ($269 million). On high-value horticulture and setting up an agriculture accelerator. Fund to finance farm startups. This will benefit companies like Kaveri. Seed Co., Dhanuka Agritech Ltd., Bombay Super Hybrid Seeds. Rashtriya Chemicals & Fertilizers Ltd.
India will select 50 destinations to promote domestic tourism to boost travel demand. It will also develop an app to guide tourists to enhance their experience on the food street, safety. Physical and virtual connectivity. Ticket companies and hotels like Indian Railway Catering and Tourism Corporation. Thomas Cook India Limited, Indian Hotels and EIH Limited will be the beneficiaries.
Crucial to enhancing last-mile connectivity, India has decided to build 50 extra airports. Heliports and aerodromes and identified 100 new projects. Railways will enjoy record capital expenditure of Rs 2.4 trillion. Adani Airport Holdings Ltd., GMR Airports Infrastructure Ltd. GVK Airport Developers Ltd., and Larsen & Toubro Ltd. and Bharat Heavy Electricals Ltd. It’s a win for construction companies like this.
As expected, Modi’s administration has given some relief to taxpayers. Individuals with income up to Rs 700,000 will not have to pay tax under the new income tax regime. The number of tax slabs was reduced, while the largest tax rate was cut to 39%. This would leave more money for the middle. Class which could also increase consumption demand.
Higher capital expenditure and investment for housing. infrastructure, railways announced in the budget are positive. For steel mills and cement manufacturers. Key beneficiaries include Tata Steel Ltd., JSW Steel Ltd., Jindal Steel & Power Ltd.
India plans to boost green mobility by exempting import duties. On capital goods needed to manufacture lithium-ion cells used in electric vehicle batteries. It is Exide Industries Ltd. and Amara Raja Batteries Ltd. Battery makers like Tata Motors Ltd., Mahindra & Mahindra Ltd. Such will be a boost for automakers
The budget envisages Rs 350-billion investment in energy transition and carbon neutrality initiatives. The government will provide financial support. To the battery energy storage system with a capacity of 4,000 MWh.
Shares of ITC Ltd and Godfrey Phillips India plunged in early Mumbai trading after India hiked a tax. effective February 2, to around 16% on certain cigarettes.
Jewelery stocks fell after the government. Left gold import tax unchanged despite demands from. The bullion industry to roll back the hike announced in July. The government has also increased import duty on silver. A higher tax raises costs for consumers because the country. Imports almost all the bullion it uses. Benchmark gold futures in Mumbai rose 1.3% to an all-time high of Rs 57,950 per 10 grams. The main losers will be Kalyan Jewelers India Limited, Titan Co. and PC Jewelers Limited.
Indian state-run refiners Indian Oil Corporation, Bharat Petroleum Corporation. Hindustan Petroleum Corporation are likely to suffer as the government has not announced. Any compensation for losses to keep a check on diesel and petrol prices. The company and the oil ministry have demanded. Partial compensation for the loss through budgetary support.