Budget 2021 To Focus On Growth

The Union Budget is one of the biggest events for the stock market every year. Investors keenly look forward to the announcements made by the finance minister to understand which sectors are being prioritized by the government. Active investors can make tactical portfolio allocation keeping in mind the budget announcements and often investors profit from the pre-budget rally. But do markets always inch higher before the budget and do markets provide extraordinary returns post budget? What is the market telling you right now? Yogesh Supekar highlights how the markets have performed pre and post-budget over the past decade even as Geyatee Deshpande highlights which sector stocks have shown a tendency to do well around the budget

- Yogesh Supekar

The budget session starts on January 29 and the announcements will be done on February 1. The sessions will be keenly watched by investors since the related announcements would help understand which sector gets how much support and growth impetus from the government. The Union Budget is one of the most important events for the markets and the budget this year may set the tone for the markets in 2021. It is already touted as ‘budget of the century’ by the finance minister herself. The fact is that it is going to be one of the most difficult budgets, coming in the wake of the pandemic that has hit the economy hard.

Almost all of the sectors have some expectations from the finance minister. Some sectors want the GST laws to be less draconian; the MSME has demanded that the limit of the collateral-free loans be extended; the steel sector wants that the custom duty be relaxed on select products that are used as raw material; the housing sector definitely would like to see some tax sops in order to boost demand; the NRIs are expecting some tax sops from the government; and so on. Meanwhile, the wish list of common man is not short as well when it comes to expectations from the budget.

Praveer Sinha CEO and MD, Tata Power

The unit cost of solar power recorded a new low in 2020. While this is good news for mainstreaming clean energy in India, there is a lot of catching up to do on the generation or supply side. One of the key focus areas of this budget for the power sector can be to provide mid to long-term fiscal incentives to expand our manufacturing base and push harder for more local manufacturing of solar panels and other components that are today dominated by imports. The pandemic has pushed us back on new projects.