SBI, Hero Moto, Asian Paints, Escorts, Polycab, Dixon Tech to Amber Enterprises II Policy reforms likely to continue even with limited fiscal space says Axis Securities
Even as past budgets have disappointed the equity markets more often, the finance minister has promised a landmark budget for FY22. Whether landmark or not, the FY22 budget will be historic in the face of an unprecedented pandemic which has caused great economic loss. India has managed the pandemic much better than many developed economies and the cost borne by the government has been manageable.
Even as past budgets have disappointed the equity markets more often, the finance minister has promised a landmark budget for FY22. Whether landmark or not, the FY22 budget will be historic in the face of an unprecedented pandemic which has caused great economic loss. India has managed the pandemic much better than many developed economies and the cost borne by the government has been manageable.
The finance minister has been unequivocal about spending on capital expenditure for reviving the economy and creating jobs. At this juncture the budget appears to be quite constructive; however, the fiscal room afforded even after considering the improving economy and better-than-expected tax collections is not very significant.
See Zee Business Live TV Streaming Below:
Positive Budget Play:
Hero Moto, Escorts, Maruti, Endurance tech, Polycab India, Dabur, Asian Paints, SBI, Canfin Homes, Dalmia Bharat, JK Cement, Star Cement, PI Industries, Dhanuka Agritech, Amber Enterprises, Dixon Tech
Negative Budget Play:
ITC, Godfrey Phillip, VST Industries
Axis Securities broad contours for FY22 Union Budget are as follows:
Focus on Job creation:
The broad focus of the government will be job creation. This could mean more impetus on infrastructure and fiscal expansion using off balance sheet structures. While fiscal expansion appears to be challenging considering the fiscal deficit which will expand to 7.5% in the current fiscal year, job creation through government activities is a necessity as private capex continues to be sluggish. The MSME sector is likely to gain more benefits in the upcoming budget, relaxation in recognition of stress assets is expected to extend for MSME.
Public Health and Vaccination rollout will be key focus areas:
Public health has become very critical and further investments in public health infrastructure seem very likely. Vaccination roll out will be a very large project involving significant government expenditure. The outlay for this mega project and possible funding structure could become critical aspects of the budget.
Tax structures likely to be maintained:
Corporate taxes were reduced in 2019 and this structure is likely to be maintained in FY22 to encourage private investments. Personal income tax structures are also likely to be maintained as additional taxes will disrupt consumption. The FY21 divestment targets were quite steep and are unlikely to be met which will be rolled over into FY22.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
EPF vs SIP vs PPF Calculator: Rs 12,000 monthly investment for 30 years; which can create highest retirement corpus
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
09:04 AM IST