Budget 2022 expectations from agriculture, EV, startup, infrastructure and renewable energy space

Union Budget 2022 will be presented against the backdrop of economic revival post covid second wave and the looming danger of possible third wave.

Considering this scenario, Finance Minister Nirmala Sitharaman will have to walk a tight path of fiscal consolidation on one side and increased sops to the manufacturing sector in order to generate employment on the other.

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We spoke to Atish Matlawala, Sr Analyst, SSJ Finance & Securities to share his expectations from Budget 2022:

Agriculture:

A special emphasis is expected for the agricultural sector considering upcoming assembly elections in farming states like Punjab and Uttar- Pradesh.

Infrastructure:

This government has been aggressive in creating world-class infrastructure across the country and it goes without saying that an outlay for infra spending will see a substantial increase.

Infrastructure is capital intensive and needs to have long-term loans at competitive rates and therefore we may see a roadmap prepared to borrow international funds.

Infrastructure will include Roads, Ports, Airports, Housing, Tap water for every household, and Irrigation. Sectors like Infra, Steel, Cement, Pipes, and Aviation will directly benefit from these.

Renewable Energy:

There are certain sectors like EV, Renewable energy and Medical infrastructure which are expected to receive sops in the upcoming budget.

Fight against COVID has forced India to upgrade its medical infrastructure and we believe this focus to continue going ahead.

To reduce its carbon footprints, it is necessary for India to switch to cleaner fuel and we believe India has done enough to prepare a base for exponential growth in Electric vehicles.

Start-up:

The government will also like to promote the start-up ecosystem in the country and can announce steps relating to ease of raising funds and a favorable environment to conduct business.

This will help in creating employment opportunities which we believe is very important for revival in demand post covid era.

Exports:

Budget 2021 will also focus on giving a boost to exports and curbing non-essential imports in order to control the trade deficit. Export-oriented sectors like Textiles, Engineering goods, IT, and Pharma may receive sops to boost exports.

Divestment| Public Sector:

We can also see announcements related to privatization of public sector enterprises and the roadmap for the IPO of Life Insurance Corporation.

In order to achieve a goal of USD 5 trillion economy government has announced PLI schemes for 13 sectors.

We expect this budget to take a step forward and announce reforms related to reducing the compliance burden on companies to encourage more companies (Domestic & MNC’s) to make investments in the country.

Income Tax:

We do not expect any changes in personal income tax but we do expect changes to make things simpler.

We also do not expect any changes in taxation related to Financial (Equity, Debt and Commodity) markets.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)