Union Budget 2024, which will be announced later today, July 23 is anticipated to be growth-focused, with several measures aimed at bolstering the rural economy, said brokerage house Motilal Oswal, in its pre-budget note.
As per the brokerage, the government is likely to continue its emphasis on capital expenditure and investment-led growth, alongside initiatives to revive consumption. The projections for tax and non-debt capital receipts presented during the Interim Budget in February 2024 are expected to be maintained, it added.
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This Budget will be a particularly crucial one as it marks the first budget following the 2024 General Elections. Although the BJP remains in power, it no longer holds a majority on its own, making this budget highly anticipated and closely watched.
The brokerage has released a list of 18 stock picks across various sectors that are expected to be in focus today. Let’s take a look:
Capital Good and Infra: L&T, Siemens, and NTPC
Defence and Railways: Bharat Electronics (BEL), Hindustan Aeronautics (HAL), and Rail Vikas Nigam Ltd (RVNL).
Rural: M&M, Supreme Industries, and Dabur
Manufacturing: Tata Motors, Kaynes Tech and Exide Industries
Real Estate, Cement, and Building Materials: Godrej Properties, KEI Industries, and Ambuja Cement
PSUs: GAIL, SBI, and HUDCO.
Apart from these top stocks in focus, the brokerage also highlighted that one of the significant aspects is the Reserve Bank of India’s transfer of ₹2.11 lakh crore, which implies excess receipts of about ₹1.5 lakh crore for FY25. MOSL expects that a large portion of these additional receipts will be allocated to various expenditures, with a smaller portion potentially being used to reduce the fiscal deficit.
Key allocations and adjustments include:
Fiscal Deficit Reduction: MOSL expects an estimated ₹30,000-40,000 crore could be utilized to reduce the fiscal deficit to 5 percent of GDP, down from the 5.1 percent of GDP announced in the Interim Budget.
Capital Expenditure Loans: Another ₹30,000-40,000 crore in capex-related loans could be provided to states, enhancing the Center’s total capital spending, it further stated.
PM-KISAN Installments: It also estimates that the installments under the PM-KISAN scheme could be increased by 50 percent to ₹9,000 per annum, which would entail an additional cost of ₹30,000 crore.
Incentives for Taxpayers: The remaining ₹50,000 crore could be used to offer more incentives under housing or other schemes to encourage taxpayers to shift to the new tax regime, added the brokerage.
Over the past decade, the BJP has cultivated an image of a clean government, focusing on minimizing wasteful spending and corruption. This has been achieved by making the Budget more transparent, reducing off-budget expenditures and borrowings, leading to higher capital expenditure allocation and maintaining fiscal prudence. MOSL expects that this philosophy will continue, ensuring policy continuity.
However, coalition politics might pose challenges in passing legislation on more ambitious government reforms in areas such as agriculture, land, labor, and judiciary, which are typically beyond the scope of the Budget, it further stated.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
