NEW DELHI: Prime Minister Narendra Modi’s Government Delivered India’s Annual Speech budget on Wednesday introduced a series of measures aimed at bolstering infrastructure to create more jobs and attract investment ahead of next year’s key national elections.
With a year to go before the Lok Sabha polls, it will be important for Modi to address the issues of high unemployment and inflation as he looks to win a third consecutive term. finance minister Nirmala Sitharaman focused on farmers, the so-called backward class, and women to deal with inequalities exacerbated by the pandemic.
The government increased capital spending 33% to 10 trillion rupees ($122 billion), allowing the country to expand its network of roads, ports and airports, and making the country an attractive destination for foreign investors. Investors.
winner
Agriculture
The government has increased spending in the farm sector, which accounts for about 19% of the economy. The budget proposes to spend 22 billion rupees ($269 million) on high-value farming and establish an agricultural accelerator fund to fund farm startups. This will benefit companies like Kaveri Seed Co., Dhanuka Agritech Ltd., Bombay Super Hybrid Seeds, Rashtriya Chemicals & Fertilizers Ltd.
travel
To capture the spike in tourism demand, India will select 50 destinations to promote domestic tourism. It will also develop an app to guide tourists about food streets, security, physical and virtual connections to enhance their experience. Ticketing and hotel companies such as Indian Railway Catering and Tourism Corp., Thomas Cook India Ltd., Indian Hotels and EIH Ltd. will be the beneficiaries.
the infrastructure
Playing an important role in enhancing last-mile connectivity, India has decided to build 50 more airports, helipads and airfields, and identify 100 new projects. Railways will benefit from a record capital expenditure of 2.4 trillion rupees. This is a win for airport operators like Adani Airport Holdings Ltd., GMR Airports Infrastructure Ltd., GVK Airport Developers Ltd., and construction companies like Larsen & Toubro Ltd. and Bharat Heavy Electricals Ltd.
taxpayers
As expected, Mr. Modi’s administration has provided some support to taxpayers. Individuals earning up to Rs 700,000 will not have to pay tax under the new rules Income Tax regime. The number of tax tables has been reduced, while the maximum tax rate is cut to 39%. This will leave more money for the middle class and can also boost consumer demand.
metal/cement
Higher capital expenditures and investments on housing, infrastructure, and railways announced in the budget are positive for steel mills and cement producers. Major gainers include Tata Steel Ltd., JSW Steel Ltd., Jindal Steel & Power Ltd.
Tram
India plans to give an impetus to green mobility by exempting customs duties on the import of capital goods needed to manufacture lithium-ion batteries used in electric vehicle batteries. This will be an impetus for battery manufacturers like Exide Industries Ltd. and Amara Raja Batteries Ltd. and automakers such as Tata Motors Ltd., Mahindra & Mahindra Ltd.
Green energy
The budget provides an investment of Rs 350 billion in energy transition and carbon neutrality initiatives. The government will provide financial support for battery-powered energy storage systems with a capacity of 4,000 megawatt-hours.
LOSER
Cigarette Making Machine
Shares of ITC Ltd. and Godfrey Phillips India plunged at the start of the Mumbai session after India raised the tax, effective February 2, on specific cigarettes by around 16%.
Jeweler
Jewelry shares fell after the government left the gold import tax unchanged despite demand from the bullion industry to reverse gains announced in July. The government also increased the import tax on silver. Higher taxes increase costs for consumers as the country imports nearly all of the gold it consumes. Benchmark gold futures in Mumbai jumped as much as 1.3% to an all-time high of 57,950 rupees per 10 grams. The main losers will be Kalyan Jewelers India Ltd., Titan Co. and PC Jeweler Ltd.
Oil factory
Indian state-owned refineries Indian Oil Corp., Bharat Petroleum Corp., Hindustan Petroleum Corp. may be the losers because the government has not announced any compensation for damages caused by the diesel and gasoline price tests. There have been requests from companies and the oil ministry to partially cover the losses through budgetary support.
foreign car companies
Imported cars, including electric vehicles, will be taxed at a higher rate. Customs duties on cars and electric vehicles with prices over $40,000 imported in complete units have been increased from 60% to 70%. Foreign automakers such as BYD Co. and Mercedes Benz dependent on imported cars to serve the Indian market will face many challenges.
With a year to go before the Lok Sabha polls, it will be important for Modi to address the issues of high unemployment and inflation as he looks to win a third consecutive term. finance minister Nirmala Sitharaman focused on farmers, the so-called backward class, and women to deal with inequalities exacerbated by the pandemic.
The government increased capital spending 33% to 10 trillion rupees ($122 billion), allowing the country to expand its network of roads, ports and airports, and making the country an attractive destination for foreign investors. Investors.
winner
Agriculture
The government has increased spending in the farm sector, which accounts for about 19% of the economy. The budget proposes to spend 22 billion rupees ($269 million) on high-value farming and establish an agricultural accelerator fund to fund farm startups. This will benefit companies like Kaveri Seed Co., Dhanuka Agritech Ltd., Bombay Super Hybrid Seeds, Rashtriya Chemicals & Fertilizers Ltd.
travel
To capture the spike in tourism demand, India will select 50 destinations to promote domestic tourism. It will also develop an app to guide tourists about food streets, security, physical and virtual connections to enhance their experience. Ticketing and hotel companies such as Indian Railway Catering and Tourism Corp., Thomas Cook India Ltd., Indian Hotels and EIH Ltd. will be the beneficiaries.
the infrastructure
Playing an important role in enhancing last-mile connectivity, India has decided to build 50 more airports, helipads and airfields, and identify 100 new projects. Railways will benefit from a record capital expenditure of 2.4 trillion rupees. This is a win for airport operators like Adani Airport Holdings Ltd., GMR Airports Infrastructure Ltd., GVK Airport Developers Ltd., and construction companies like Larsen & Toubro Ltd. and Bharat Heavy Electricals Ltd.
taxpayers
As expected, Mr. Modi’s administration has provided some support to taxpayers. Individuals earning up to Rs 700,000 will not have to pay tax under the new rules Income Tax regime. The number of tax tables has been reduced, while the maximum tax rate is cut to 39%. This will leave more money for the middle class and can also boost consumer demand.
metal/cement
Higher capital expenditures and investments on housing, infrastructure, and railways announced in the budget are positive for steel mills and cement producers. Major gainers include Tata Steel Ltd., JSW Steel Ltd., Jindal Steel & Power Ltd.
Tram
India plans to give an impetus to green mobility by exempting customs duties on the import of capital goods needed to manufacture lithium-ion batteries used in electric vehicle batteries. This will be an impetus for battery manufacturers like Exide Industries Ltd. and Amara Raja Batteries Ltd. and automakers such as Tata Motors Ltd., Mahindra & Mahindra Ltd.
Green energy
The budget provides an investment of Rs 350 billion in energy transition and carbon neutrality initiatives. The government will provide financial support for battery-powered energy storage systems with a capacity of 4,000 megawatt-hours.
LOSER
Cigarette Making Machine
Shares of ITC Ltd. and Godfrey Phillips India plunged at the start of the Mumbai session after India raised the tax, effective February 2, on specific cigarettes by around 16%.
Jeweler
Jewelry shares fell after the government left the gold import tax unchanged despite demand from the bullion industry to reverse gains announced in July. The government also increased the import tax on silver. Higher taxes increase costs for consumers as the country imports nearly all of the gold it consumes. Benchmark gold futures in Mumbai jumped as much as 1.3% to an all-time high of 57,950 rupees per 10 grams. The main losers will be Kalyan Jewelers India Ltd., Titan Co. and PC Jeweler Ltd.
Oil factory
Indian state-owned refineries Indian Oil Corp., Bharat Petroleum Corp., Hindustan Petroleum Corp. may be the losers because the government has not announced any compensation for damages caused by the diesel and gasoline price tests. There have been requests from companies and the oil ministry to partially cover the losses through budgetary support.
foreign car companies
Imported cars, including electric vehicles, will be taxed at a higher rate. Customs duties on cars and electric vehicles with prices over $40,000 imported in complete units have been increased from 60% to 70%. Foreign automakers such as BYD Co. and Mercedes Benz dependent on imported cars to serve the Indian market will face many challenges.
