Mrs. Sitharaman will present the Union Budget 22-23 on February 1, 2022. By breaking the norms last time and moving away from the British Era leather briefcase to the Bahi Khata while presenting the Union Budget 2021 and moving Digital in line with Prime Minister Narendra Modi’s Made in India vision.
Mrs. Nirmala Sitharaman used a tablet and digital copies for presenting the Budget and peeking over it. This was the first Union Budget presented after the Coronavirus outbreak or pandemic.
The main budget focus in 2022 was strengthening the health care facilities and pandemics to win the economy.
Ahead of the Union Budget FY 2022-23
This time the Budget 2022 is just away; as an investor, you must be eagerly waiting for it even though the impact of the Union budget has not been seen much on the equity market.
But it is still an important event for investors. So let us look at different sectors, and what to expect from them you will be waiting for.
The Union budget is still an important event for investors.
So let us look at different sectors and the expectations from the Union Budget 2022.
Agriculture and Speciality Chemicals
In this Budget, we expect that the Government will give a good fertilizer subsidy. This subsidy will allow you to compensate the fertilizers company for selling a product at lower than market prices to the farmers.
This will help the farmers. LIC schemes to have Chemical industries and is well.
The Government extends financial support for incentives for capacity addition reducing dependence on imports. Chemical companies to get relief by a change in customs duty for boosting India’s Domestic Production.
Stock to Focus: P.I. Industries, Dhanuka Agritech, and companies to the chemical specialty
There are high chances that the Government will bring structural changes to the taxation or corporate income tax rate regime.
There is pressure from the ordinary taxpayers to reduce their burden, the main reason can be seen as a pandemic.
Major companies expect major changes to the income tax regime from this Budget 2022.
A clear roadmap on the privatization of PSU is expected in the Budget. Any news around privatization will be positive news for them.
For Housing Finance, the Government may extend the PMAY-CLSS scheme in-line with the Government’s vision to provide Housing for All by 2022 as the pandemic has resulted in project delays.
For the MSME Sector, Rebate in Taxation, investment, and offering further incentives to MSMEs is expected from the Finance Minister.
Stock in Focus: PSU Banks and Housing Finance Companies
This time, it is giving more importance to health insurance and other insurance because of the pandemic. Therefore, it is on the higher expectation that the Government may provide incentives.
Stock in Focus: Insurance Companies
They are funding the Schemes like PM Awas Yojana and MNREGA. In addition, it will increase cement consumption in the country. The higher expectation is on home loans; extending tax holidays on profit from affordable housing projects is expected.
Fast Tracking on major highways projects. Such incentives will create more demand for cement and, therefore, a good rise to this sector.
Stock to Watch: J.K. Cement, Birla Corp, Dalmia Bharat Ltd, ACC
Higher Allocation to the transportation and Highways. The infrastructure space is at the inflection point, with both central and state governments focusing on the growth of many infra projects. The Capex Cycle is back again with renewable energy, railways, and water sources to target the expansion.
Stocks to Watch: KNR Construction, PNC Infratech, and H.G. Infra Engineering
The PLI Scheme is introduced for this sector along with the incentives for the novel drug R&D. It is expected that government might provide a deduction under section 80D to allow all the age groups on medical treatment of COVID-19.
Stocks to Watch: KIMS, Gland Pharma, and HCG
Increase in the amount of Standard Deduction for the salaried employees from Rs 50000 to Rs 100000. Focusing on GST as well for the products like T.V. and A.C., expectations are to bring down the tax rate from 28% to 18%.
Stocks to Watch: Polycab India, Amber Enterprises, and Dixon Technologies
See : What is Finance Bill ?
Metals and Mining
The steel prices have increased in the past few months, impacting MSME majorly. In the last Budget, the Government has reduced customs duty on steel imports.
In the upcoming Budget, the Government is likely to keep it as it is, without any further change or further reducing it.
The Indian Steel Association wants the basic customs duty on Coking coal, stainless steel scrap, nickel that might get reduced to nil from the current 1%+1.5% agriculture cess since the availability of these input raw materials is very low.
Stocks to Watch: SAIL, and Hindalco
The Apparel Export Promotion Council (AEPC) has higher expectations from the Government for encouraging the investment in eco-friendly and green energy by offering tax benefits and simplifying the clearance of import goods from FTA Countries.
Hence, the apparel industry requested the Government to abolish import duty and export duty as raw cotton has been steeply increasing.
This will help in stabilizing the prices of cotton in the domestic market.
Stocks to Watch: Welspun India, Gokaldas Exports, Trident, Indo Count.
The Expectation from Union Budget 2022 is higher due to the severe pandemic issues. So, let’s see how the Government helps different sectors for economic growth.
I will be back with the Budget 2022 Highlights, so stay tuned with us!