| As the NDA government prepares to present its first full-year Union Budget following the 2024 elections, expectations are high for significant reforms and strategic allocations. This research note outlines the anticipated budgetary measures for FY25, focusing on key areas such as infrastructure development, defense modernization, rural development, healthcare, and taxation. These measures are expected to drive economic growth, enhance social welfare, and support various sectors, ultimately contributing to the long-term vision of a prosperous and developed India. |
Increased Capex Spending
Expectation: We expect the continuation of high capital expenditure on roads, power, urban development, and railways to create long-term economic multipliers. The focus will be on boosting public infrastructure to stimulate economic growth and create jobs.
BJP Manifesto Highlights: Commitment to infrastructure development focusing on roads, power, and urban development.
Interim Budget Highlights: Focus on fiscal prudence and maintaining the fiscal deficit target at 5.1%.
Sectors to Benefit: Construction and Infrastructure
Stocks to Watch: Larsen & Toubro (L&T), KNR Constructions, PNC Infratech
Higher Railway Spending
Expectations: Significant investments to expand and modernize railway infrastructure are anticipated, including new lines, station redevelopment, and the introduction of modern trains.
BJP Manifesto Highlights: Expansion of railway lines, station redevelopment, and introduction of modern trains.
Interim Budget Highlights: Higher allocations for the railway sector.
Sectors to Benefit: Railways
Stocks to Watch: IRCTC, Container Corporation of India, Titagarh Wagons
Affordable Housing and Urban Development
Expectation: Funding for affordable housing and the development of new satellite townships near metro cities is expected, aimed at improving urban infrastructure and providing affordable homes.
BJP Manifesto Highlights: Promise to build 30 million new homes and improve urban infrastructure.
Interim Budget Highlights: Continued investment in affordable housing projects.
Sectors to Benefit: Real Estate Stocks to Watch: DLF Ltd., Godrej Properties, Oberoi Realty
Modernization of Armed Forces
Expectation: Increased budget to support the modernization of the armed forces, acquisition of advanced technology, and indigenization efforts.
BJP Manifesto Highlights: Increased defense budget for modernization and acquisition of advanced technology.
Interim Budget Highlights: Increased defense spending.
Sectors to Benefit: Defense Manufacturers
Stocks to Watch: Bharat Electronics Ltd. (BEL), Hindustan Aeronautics Ltd. (HAL), Bharat Dynamics Ltd. (BDL)
Farmer Support and Agri-Infrastructure
Expectation: Higher MSP for major crops, strengthening of PM Kisan Samman Nidhi, and development of agri-infrastructure such as storage, irrigation, and processing facilities.
BJP Manifesto Highlights: Higher MSP for crops and expansion of PM Kisan Samman Nidhi.
Interim Budget Highlights: Support for agricultural infrastructure and higher MSP.
Sectors to Benefit: Agricultural Equipment, Agrochemicals
Stocks to Watch: Mahindra & Mahindra Ltd., Escorts Ltd., UPL Ltd.
Support for Startups and MSMEs
Expectation: Expansion of credit programs like Mudra loans and support for startups through initiatives such as the Startup India Seed Fund Scheme to encourage innovation and entrepreneurship.
BJP Manifesto Highlights: Support for startups and MSMEs through various initiatives.
Interim Budget Highlights: Credit support for startups and MSMEs.
Sectors to Benefit: Financial Services, IT and Services
Stocks to Watch: HDFC Bank Ltd., Kotak Mahindra Bank Ltd., Tata Consultancy Services (TCS), Infosys Ltd.
Job Creation through Public Welfare Schemes
Expectation: Emphasis on infrastructure projects and public welfare schemes to create employment opportunities, particularly in rural areas.
BJP Manifesto Highlights: Focus on job creation through public welfare schemes.
Interim Budget Highlights: Public welfare schemes aimed at job creation.
Sectors to Benefit: Construction, IT and Services Stocks to Watch: Larsen & Toubro (L&T), Tata Consultancy Services (TCS), Infosys Ltd.
