Budget 2023 expectations for stock market investors: What sectors may benefit?

Market


Finance Minister Nirmala Sitharaman will present the Union Budget on Wednesday, February 1, 2023, which will be the last full budget of the present government ahead of the general elections to be held in mid-2024. The Government is expected to support capex, infrastructure creation and import substitution to ensure a high gross domestic product (GDP) growth over the coming years.

“Last 4 years, we have not seen income tax slab sops for the masses, we can expect some sops this time Pre-Election year budget sops would also include spending for the rural economy, which has been facing stress over the last 1 year, populist welfare schemes, and spending on health infrastructure. Focus will remain on growth. Manufacturing as a trend has been successful through various policies including PLI, this should see further expansion,” said Divam Sharma, Founder at Green Portfolio.

Further, as we expect a capex cycle over the coming years and as the Government wants to attract manufacturing capex, Industrial parks, sops for manufacturers, spend on infrastructure building should be on radar. Renewables will be on radar, to reduce the cost of energy to GDP, ensuring energy security and reducing import burden. This will be pushed through solar, public transport, EV related sops announcements, added Sharma.

“The world has seen the importance of energy security and keeping low energy cost as a percentage of GDP. Companies offering Distribution, Generation, Equipment’s, and EPC related services will benefit Infrastructure and allied sectors including EPC, Cement, Steel will benefit considering push for infrastructure creation by the Government. Manufacturing (PLI) related sectors, particularly Textile, Pharma, Automobile and Chemicals could benefit from further thrust by the Government. Defence Manufacturing will be on radar. We expect the Government to push local manufacturing and exports of Defence equipment,” said Divam Sharma.

The upcoming budget is likely to boost rural/agri spending by $10 billion, a growth of 15% over FY23, and maintain double-digit 20 per cent growth in public capex over the current fiscal, given that the nation will be going to the polls in mid-2024, as per a note by UBS India.


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