Total outlay of Rs3,96,135 crore on infrastructure is up by 10% over FY17 revised estimate.
Capital expenditure on defence is expected to increase by 20.6% to Rs86,488 crore.
Roads and highways allocation up to Rs64,900 crore from Rs52,447 crore revised estimate.
Rural roads construction work to accelerate to 133 km/day in 2016-17 from 73 km/day in 2011-14.
An 8% increase in allocation for railway expenditure to Rs1,31,000 crore; 3,500km of railway lines to be laid in 2017-18 against 2,800km in 2016-17.
Affordable housing has been given infrastructure status and tax incentives have been given, too. Lock-in period for long-term capital gains on land and buildings reduced from three to two years.
Customs, excise duties cut on machinery, parts used to manufacture solar power project components.
Better days ahead for road construction firms by way of fresh tenders and road projects.
In railways, companies that carry out civil works and offer track-laying and electrification services will benefit.
Incentives for affordable housing can step up supply and rational prices and lower finance cost can improve project viability.
Transactions in land and property could increase, enabling people to switch from real estate assets to liquid assets, due to lower holding period for long-term capital gains.
Cement and steel sector should do well if infrastructure does well.
Impetus to solar machinery supports indigenization, could bring down costs of solar energy eventually.
Stocks in focus:
The BSE Realty index gained 4.7%, the highest among sectoral indices for the day.
Realty stocks such as Godrej Properties Ltd, Housing Development and Infrastructure Ltd and Prestige Estates Projects Ltd rose by around 6% on easier access to low-cost funds. DLF rose by 6.7%, although it has little exposure to the affordable housing category.
Construction firms with a greater exposure to roads, such as IRB Infrastructure Developers Ltd, rose by 2.5%. GMR Infrastructure Ltd gained due to the sops for roads and airports. Larsen and Toubro Ltd gained as it is the largest play on infrastructure.
Shares of Bharat Electronics Ltd and BEML Ltd gained in the range of 1-3%, on higher defence and metro rail allocations.
Railway-linked stocks Titagarh Wagons Ltd and Texmaco Rail and Engineering Ltd lost due to a lack of clarity on railways’ capital expenditure on rolling stock.
India Cements Ltd, ACC Ltd and UltraTech Cement Ltd gained, as did steel companies such as Tata Steel Ltd and Steel Authority of India Ltd.