The Indian share market welcomed the Indian budget 2022-23 that was announced by the finance minister on February 1, 2022. The market jumped over 800 points and was trading around 58,866 points soon after the budget was announced in Parliament by Nirmala Sitharaman.
Read also: Budget 2022-23 will aim to recover pandemic-led loss: Sisodia
Sectors like pharma, IT and FMCG, and metals were trading up by 1-2% after the budget announcements came in. The budget focused on infrastructure and increased CAPEX investments to drive growth. Other measures towards creating a digital and green economy are expected to set the foundation for the long-term vision of the Indian economy.
The stocks related to the infra sector and FMCG sector are expected to gain from the increased investment and higher public spending. As a result, most stocks from these sectors were trading in the green.
Sectors like auto, cement, and oil & gas registered a decline of around 1% because of some expected announcements that did not see the light of the day. The downward movement in the auto stocks can also be due to the monthly sales numbers that were announced by automobile companies for January 2022. Announcements related to the battery-swapping policy that will set the foundation for higher usage of EV vehicles were seen to be a positive factor driving growth in stocks of EV companies.
As there was no additional tax announced on cigarettes and tobacco products, a positive effect was seen in the stocks of ITC, Godfrey Phillips, Golden Tobacco, etc.
One of the most important steps in the budget was to announce the 30% flat tax on digital assets being sold. Investors now have the required clarity on the stand of the government on cryptocurrency, NFTs, and other digital assets.
The fiscal gap expected at 6.4% of GDP in 2022-23 and increasing FY22 fiscal gap to 6.9% from 6.8% was seen as a challenge by the experts. Market watchers also believe that it will be tough for the government to maintain the targeted 6.4% fiscal deficit in the next financial year.
Read also: Tax for cooperative societies reduced in Union Budget
Overall, the market welcomed the budget positively as there were few positive announcements and did not have some expected negative announcements. Experts believe that the budget is in the right direction. The focus on infrastructure and public spending is expected to boost growth and consumption in the Indian economy.
