This was presumably the toughest budget yet for Prime Minister Narendra Modi, as his government operates the twin challenges of steering the $2.7-trillion Indian economy out of an unusual recession while ensuring more resources to fight the century's worst pandemic.
Although his personal popularity remains sound, angry farmers on the streets and soaring rates of joblessness had raised budget expectations in the country that has been the second-worst hit by Covid-19. Finance Minister Nirmala Sitharaman had secured an unprecedented budget aimed at buoying the economy.
Here's a shortlist of winners and losers from Monday's budget decisions.
The Covid-19 pandemic prompted Sitharaman to increase healthcare spending by 137% this year, an improvement over the less than 2% of gross domestic output that India has traditionally spent on health annually. The announcement increased shares of hospital operators including Apollo Hospitals Enterprise Ltd., Max Healthcare Institute Ltd., and Narayana Hrudayalaya Ltd. Other companies likely to serve may include Dr. Lal Pathlabs Ltd., Metropolis Healthcare Ltd., and Thyrocare Technologies Ltd.
Real Estate & Construction
Real estate developers are set to profit from plans for a new development finance institution to meet funding requirements for infrastructure projects. Godrej Properties Ltd., Oberoi Realty Ltd., and DLF Ltd., and Prestige Estates Projects Ltd. are amongst those likely to gain.
Key infrastructure players like Larsen & Toubro Ltd. and KNR Constructions Ltd. and IRB Infrastructure Developers Ltd. also resemble set to benefit.
The release of an additional 11,000-km of highways and metros, along with rapid rail transport projects for 27 cities, and a long-awaited vehicle scrappage policy increased stocks of metal companies that will cater to added demand for steel and aluminum. These involve Jindal Steel & Power Ltd., JSW Steel Ltd., Tata Steel Ltd., Hindalco Industries Ltd., Vedanta Ltd., Hindustan Zinc Ltd., and Hindustan Copper Ltd.
The government declared it was forming an asset management company to take over stressed assets of banks in an attempt to clean up one of the world's worst pile of bad loans. Banks, insurers rose on plans for setting up a bad-debt manager. State Bank of India Ltd., Bank of Baroda, Canara Bank, Union Bank of India, Bank of India, and Punjab National Bank could be among the recipients.
Sitharaman's announcement of the company of seven mega textile parks to be launched in three years could boost the sector, benefiting organizations including Century Textiles Ltd., Raymond Ltd., Trident Ltd., and Arvind Ltd. among others.
A higher-than-expected $164-billion borrowing program for the new fiscal year hit India's sovereign bonds, which slid after the release. The government also plans to raise another 800 billion rupees by this fiscal year, at the peak of its projection of a record 13.1 trillion rupees of debt sales.
India increased import tariffs on solar and mobile-phone equipment and auto parts, among others. Advertised to boost local manufacturing in line with the government's focus on self-reliance, the move may raise more concerns about India's trade policies that are increasingly seen as protectionist.
The farm sector received notice but there were no major announcements that could help address the ongoing unrest on New Delhi's borders, where thousands are complaining about the repeal of new agriculture laws. There were also no significant details on boosting consumption in the rural economy. The budget estimate for payment on the rural jobs scheme was 730 billion rupees for the financial year 2022, connected to the 1.1 trillion expenditure in the revised estimate for FY21.
India's biggest services export subscribers received little attention in the budget. There were no sops to support the future of information technology from Sitharaman this year for companies including TCS Ltd., Infosys Ltd., Wipro, HCL Technologies, Tech Mahindra, simultaneously with mid-sized firms like LTI, Mindtree, Persistent, and Hexaware.