Interim Budget 2024: As the investors are focusing on the Q3 earnings performances of India Inc. that have kickstarted recently, the volatility in the markets remains high. The benchmark indices that had remained in a regular uptrend till last week, have seen significant correction this week. Amidst various events that may influence the markets over the coming weeks includes the Budget to be announced on February 1, 2024. Since the general elections are due in net few months and most likely to take place in May 2024, the budget to be presented by the finance minister on 1 February 2024 will be an the Interim only.
Not surprising Amar Ambani, Executive Director, YES Securities said that “Budgets prior to general elections are usually a lukewarm affair.
Also Read- Budget 2024 expectation: Fiscal consolidation to continue in FY25 says BofA
However it may still have something in store for investors that they will need to remain watchful for. One key theme which has remained key highlight of the current government is its focus on infrastructure spending and capex.
Ambani also said that we can expect the government to continue with its agenda of boosting capex as a percentage of total expenditure. He also foresees non-government enterprises incrementally cajoled through incentives to help lift the private capex cycle.
Talking of fiscal prudence, the government is likely to be aggressive on its fiscal deficit target, especially in the wake of buoyant tax collections. We can expect a commitment to achieve a 4.6% fiscal deficit in FY26. Given the inclusion of Indian bonds in global indices, the same seems imperative.
Also read- Budget 2024: Expectations high for continued focus on ‘Housing for All’
The investors will be watchful on the the governments populist measures and specialty incentives to the farmers.
However Ambani says that Income support to farmers in the last instance was introduced just prior to the general election. This time around, given the flurry of subsidies in various forms since Covid, including distributing food grains, and coupled with the strong mandate in recent state elections, we don’t foresee the government announcing any material sops on the socio-developmental front.”
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!
Download The Mint News App to get Daily Market Updates.
Published: 20 Jan 2024, 03:28 PM IST