22nd June 2024- After the Lok Sabha elections, all eyes are eagerly awaiting the announcement of the full budget, scheduled for presentation in the third week of July.
Recently, the finance minister engaged in pre-budget consultations with prominent experts from the financial and capital markets sectors in New Delhi. According to media reports on June 20, 2024, she also held discussions with industry stakeholders and noted economists in preparation for the Union Budget 2024-25.
Since the elections, the Indian stock market has demonstrated resilience, steadily climbing higher each week. Analysts attribute this positive trend to easing concerns over election outcomes and improved global sentiment. With a coalition government now in place, there is optimism that the upcoming budget will strike a balance between growth-oriented policies and measures aimed at addressing popular expectations.
Vinod Nair, Head of Research at Geojit Financial Services, remarked, “The Indian market initially continued its upward trend as concerns over election outcomes eased and global sentiment improved. With a coalition government in place, there is optimism that the upcoming budget will strike a balance between growth initiatives and populist measures. Additionally, expectations are high for government actions aimed at stimulating consumption, a critical area to focus on.”
Looking ahead to the Full Budget 2024, Prashanth Tapse, Senior VP Research Analyst at Mehta Equities Ltd, anticipates potential market volatility. He emphasized the government’s likely focus on sustaining economic growth and achieving the target of a $5 trillion economy. “As the first budget of Modi 3.0, expectations are high for tax reliefs across sectors and measures to boost economic activity,” Tapse stated.
The Final Budget 2024 is expected to prioritize fiscal measures aimed at boosting economic growth and enhancing infrastructure spending. There is also anticipation for incentives to bolster domestic manufacturing in strategic sectors.
Ajit Mishra, Senior VP Research at Religare Broking Ltd, highlighted emerging market themes in the lead-up to the Union Budget. “There has been notable interest in agriculture-related sectors, defense, and a potential reversal in IT trends. Investors are advised to maintain a positive outlook, aligning with sectors and themes poised for growth,” Mishra suggested.
Prashant Tapse from Mehta Equities emphasized sectors likely to benefit from the July Budget 2024, including Infrastructure, Defense, Railways, Renewable Energy, Agriculture, Electric Vehicles (EV), and support for the MSME sector. “We do not foresee changes in Securities Transaction Tax or related taxes, reflecting the government’s focus on developing capital markets,” Tapse added.
Looking ahead, the budget is anticipated to introduce reforms aimed at attracting foreign investments, simplifying the tax structure, and promoting green energy initiatives. Ajit Mishra of Religare Broking emphasized, “Participants will also watch for initiatives supporting rural economy, job creation, and strengthening the MSME sector.”
Conclusion
Stakeholders are optimistic about the upcoming budget’s potential to drive economic growth through strategic reforms and sector-specific incentives. As expectations build, market participants are advised to stay informed and position themselves strategically in anticipation of the budgetary announcements.
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