BackUnion Budget 2022: All you need to know
One of the most keenly awaited announcements in the Union Budget every year is related to personal taxation. Analysts feel that Finance Minister Nirmala Sitharaman may announce major relief to taxpayers
PremiumAs Union Finance Minister Nirmala Sitharaman is scheduled to present her fourth Union Budget for the next financial year tomorrow, all eyes would be on how the Centre balances out populist measures while walking the tightrope of fiscal consolidation.
India, which is set to regain the world's fastest-growing major economy title, is expected to prioritise growth over fiscal consolidation by boosting spending, as per economists surveyed ahead of Tuesday's presentation of the country's federal budget.
Expectations from Budget 2022
- One of the most keenly awaited announcements in the union budget every year is related to personal taxation. Some analysts feel that the finance minister may announce major relief to taxpayers.
- The expected relief include an increase in the basic exemption limit from ₹2.5 lakh to ₹3 lakh. For senior citizens, it is likely to be increased to ₹3.5 lakh from the present ₹3 lakh.
The top income slab is also likely to be revised upward from the existing ₹15 lakh.
- The fintech industry is stressing that the fiscal and non-fiscal incentives are needed to promote financial inclusion and move towards a less-cash economy.
The fintech industry and experts have urged Finance Minister Nirmala Sitharaman to lower the TDS rates, saying such a move would free the capital for the sector without any impact on the government's revenue.
- The forthcoming Budget should focus on Environmental, Social and Governance (ESG) issues by providing tax and non-tax incentives needed to promote green economy, say experts.
- Industry body CII has pitched for additional incentive rates to be included in the Production Linked Incentive Schemes based on the number of jobs created
- While Indian corporates are expecting some key announcements which will enable them to reset their growth agenda, individual taxpayers are expecting some more disposable income in their hands to invest and consume more.
- The government should look at according priority status to the healthcare segment while increasing the public expenditure on the sector to at least 3 per cent of the GDP in the upcoming Union Budget.
- The tourism sector is hoping for relaxation in taxes from the upcoming Union Budget 2022-23 amid the ongoing pandemic.
Cabinet to meet tomorrow to approve Budget 2022
A meeting of the Union Cabinet will be held on Tuesday at 10:10 am to approve the Union Budget 2022-23.
After getting the nod from the cabinet, Finance Minister Nirmala Sitharaman will present the Union Budget 2022-23 in a paperless form for the second time on February 1. Earlier, the Union Budget of 2021-22 was delivered in paperless form last year for the first time.
As per the Secretariat, the Economic Survey 2021-22 will be laid by Finance Minister Nirmala Sitaraman in Lok Sabha on January 31, while the Budget will be presented by her on February 1 at 11 am.
From February 2 to February 11, the House is scheduled to sit from 4 pm to 9 pm. Thus, five hours have been scheduled per sitting during the first part of the Budget Session.
As per the Secretariat, there will be two major items of business during the first part of the budget session; a discussion on the Motion of Thanks on the President's Address and a general discussion on the budget.
Budget 2022: Where to watch
The budget presentation will be broadcast live on Sansad TV. People can also watch the event on various other news outlets and on various social media platforms such as YouTube, Twitter and Facebook.
Stocks likely to benefit from Budget 2022
Infrastructure, rural development and health-care stocks are among analysts’ top picks as India’s government is set to step up spending in a budget aimed at kickstarting investment to boost growth.
Here are the top sector and stock picks by some leading brokers:
Infrastructure
A gauge of India’s top-30 companies in roads, air, ports, shipping, railways and other utility services, climbed 36% in 2021, its best gain since 2009, as the government continues to fire up the public spending to create jobs and boost growth. ICICI Direct expects the allocation to remain “buoyant" with higher spending on roads, defense, water, housing and railways.
Top picks include Polycab India, HG Infra Engineering, KNR Constructions, PNC Infratech, Larsen & Toubro, Thermax, KEI Industries, ABB India, Siemens India, Ramco Cements, UltraTech Cement, ACC, Ambuja, Bharat Dynamics, Bharat Electronics, NTPC, Container Corporation of India
Renewable Energy/EV
In line with the government’s focus on reducing emissions and dependence on fossil fuels, analysts expect a raft of support for infrastructure development for electric vehicles and green energy generation.
“Thrust is expected on sustainable technologies with certain benefits aimed at accelerating the adoption of EVs in India. Moreover, the EV charging infrastructure segment is expected to receive a boost to support EV adoption further," according to Chadawar of Axis Securities.
Top picks include Maruti Suzuki India, Tata Power, Adani Green, Hero Motocorp, Bajaj Auto, TVS Motors, Mahindra & Mahindra, Tata Motors, Minda Corporation, Gabriel India, Dixon Technologies
Rural/Agriculture
Sell-side analysts expect continued support for farming and rural areas through more aid for food processing, incentives linked to production as well as higher farm credits, and subsidies for fertilizers and crop protection. Increased agricultural industry spending will benefit consumer goods companies struggling with higher input costs.
“Given the backdrop of rising Covid cases, we think that policy makers will need to strike a balance between boosting rural demand and investing in infrastructure while continuing on the path of fiscal consolidation to maintain macro stability," Goldman Sachs (India) Securities Pvt. analysts led by Santanu Sengupta wrote in a note.
Top picks include PI Industries, Dhanuka Agritech, Rallis, Godrej Agrovet, Hindustan Unilever, Britannia, Dabur and Nestle India
Health Care/Pharma
In continuation of its focus on bolstering health-care infrastructure, the government is expected to increase spending on companies to boost production, as well as tax relief for individuals buying health insurance, better access to medical care and a generous push for drug research.
Top picks include Apollo Hospitals, Narayana Healthcare, Shalby Ltd., Gland Pharma, Krishna Institute of Medical Sciences, Healthcare Global Enterprise, Max Health, HDFC Life, SBI Life and most drug makers
India sees economic growth slowing to 8-8.5% in FY23
Ahead of the annual budget on Tuesday, India has forecast its economy will grow 8% to 8.5% for the fiscal year starting in April, down from 9.2% projected in the current year, as it fights a spike in coronavirus cases and rising inflationary pressure.
All macro indicators indicated Asia's third-largest economy was well placed to face challenges, helped by improving farm and industrial output growth, the government's annual economic survey said today.
The report was tabled by finance minister Nirmala Sitharaman in parliament.
With agency inputs
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