Union Finance Minister Nirmala Sitharaman delivered her fourth budget for this year, which got a thumbs up from the markets as well as the analyst community.
Most experts, which Zeebiz.com spoke to, gave a rating of 4 out of 5 to Budget 2022 (5 being the best). Indian markets also closed with gains of over 1 per cent on Budget Day but pared some gains towards the close of the day.
Almost 5 out of 6 analysts gave a rating of 4, while one expert gave a rating of 3.5 to Budget 2022.
The Budget was pro-growth and a visionary one that would help the economy to touch $5 trn by FY26. The Budget largely focused on the growth engines of the economy such as infrastructure, healthcare, rural development as well as education.
The FY23 fiscal deficit is targeted at 6.4% of GDP (in line with expectations) against 6.9% in FY22; however, the gross borrowing stands at an elevated Rs 14.95 trn for FY 22-23, considerably above market expectations.
The government proposes to hike the capital expenditure allocation to Rs. 7.5 trillion as against Rs. 5.54 trillion budgeted in FY2022 and Rs. 6 trillion as per revised estimates. A rise in CAPEX will help in boosting growth across sectors and generate employment opportunities.
“The Union Government delivered a pro-growth budget while attempting a modest fiscal consolidation. The Government’s focus was on promoting capital expenditure for triggering higher economic growth multiplier and crowding-in private capex,” Harshad Patil, Chief Investments Officer, Tata AIA Life Insurance, said.
“The Budget provides a sustained impetus for creating world-class integrated multi-modal transport and logistics infrastructure while focusing on inclusive development, facilitating energy transition as well as providing a roadmap for financing investments,” he said.
The equity markets have welcomed the growth-oriented budget as well as the outsized increase in capex provided for. Now Reserve Bank of India policy will be in focus, suggest experts.
“The budget is behind us and now 9th Februrary’22 become relevant. The commentary around RBI raising rates in its coming meeting would be that much more relevant,” Motilal Oswal, MD & CEO, Motilal Oswal Financial Services, said.
“Having said that, in my opinion, equity markets in India are likely to see 20000 on the nifty and about 65000 in the Sensex by December 2022 on the back of 15-20 per cent earnings growth in FY23,” he said.
Oswal further added that sectors like infrastructure, real estate, industrials, financials, Information technology, and pharmaceuticals are likely to outperform while consumer staples and discretionary are likely to underperform”