Lohit Bharambe and Avalokita Pandey team up to decode the Union Budget sectorwise. They end up identifying two sectors which will immensely benefit from the Budget and one sector which will get negatively impacted. So, what will be your investment decisions, then? Read and decide.
While we believe the Union Budget tabled by Finance Minister Arun Jaitley on February 1 can be easily termed as a growth-oriented one, we also see a serious balancing act done by the Finance Minister working under the guidance of Prime Minister Narendra Modi. Jaitley aimed at spending most of the available funds in rural India, but then, he ensured bit of happiness even for the urban population. The Finance Minister also tried to pacify the angry and upset populace due to the demonetisation drive initiated three months ago by easing income tax rules. The markets within few minutes of the Budget document unfolding in the parliament, reacted sharply and clocked significant gains, showing investors’ confidence on the crucial government decisions. Even as we feel the sentiment here onwards may remain positive at least for some time, after analysing 10 sectors, we have identified three sectors which have been affected by this Budget. Two sectors, agriculture and infrastructure, have immensely gained from this Budget while pharmaceutical sector was grossly ignored and indirectly got even adversely impacted. So what will be the key takeaways for the retail investors who remain invested in these three sectors—we try to analyse the situation and reach to a conclusion.
Agriculture
Shares of fertiliser and irrigation firms and tractor-makers surged up to 6 per cent in trades on February 1 after Finance Minister Arun Jaitley doled out a big bonanza for the farming sector. Among a slew of measures, the Finance Minister raised agriculture credit to farmers to a record ₹10 lakh crore. The Budget pointed out that the farmers’ earnings will almost double in the next five years. Good monsoon along with Rabi season will help increase expenditure on modern equipments required for farming. The manufacturers of farming equipments like KSB Pumps, Jain Irrigation Systems, Escorts, Mahindra & Mahindra may gain in the near future.
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