Union Budget 2024: A Guide for Students Preparing for Competitive Exams

The upcoming Union Budget 2024 is expected to be a significant event in the Indian economy, with over 50 smallcase managers surveyed by investment platform smallcase sharing their expectations and strategies for the budget. As students preparing for competitive exams, it is essential to understand the key aspects of the budget and how it may impact the stock market.

Budget Expectations

According to the survey, smallcase managers expect a hike in India’s planned capex spending, with a focus on infrastructure development, power generation, railways, and defence. They also predict more budgetary allocations in these areas to stimulate growth and boost rural consumption. The fiscal deficit target is expected to be further reduced, with a possible revision of 100 basis points to 4.5% by 2026. The Reserve Bank of India’s substantial dividend of ₹2.11 lakh crore is expected to boost the fiscal deficit target.

The survey also suggests that the GDP target for FY25 is expected to be in the 7-8% range, with the GDP crossing the $4 trillion mark. In terms of taxes, over 60% of the smallcase managers do not foresee any notable changes in the upcoming budget.

Sectors in Focus

The smallcase managers have identified infrastructure, power, defence, and manufacturing as the sectors that will be in focus in the upcoming budget. They also believe that the clean tech space will benefit from the budget’s focus on sustainable developments. Other major growth areas include infrastructure, transportation, and real estate.

Portfolio Strategy

To combat near-term volatility, smallcase managers recommend a well-diversified portfolio with exposure to gold, silver, and gilt. They suggest allocating capital to companies with exponential growth rates due to tailwinds at reasonable prices. Additionally, they recommend keeping 10-20% cash in the portfolio for buying on dips. Investors should not speculate on any specific event but allocate capital for the long term in smallcases with good growth opportunities and reasonable valuations.

Key Takeaways

• The Union Budget 2024 is expected to be fiscally prudent yet expansionary.
• Smallcase managers expect a hike in India’s planned capex spending and more budgetary allocations in areas like infrastructure, power, railways, and defence.
• The fiscal deficit target is expected to be further reduced, with a possible revision of 100 basis points to 4.5% by 2026.
• The GDP target for FY25 is expected to be in the 7-8% range, with the GDP crossing the $4 trillion mark.
• Smallcase managers recommend a well-diversified portfolio with exposure to gold, silver, and gilt, and keeping 10-20% cash in the portfolio for buying on dips.
• Investors should not speculate on any specific event but allocate capital for the long term in smallcases with good growth opportunities and reasonable valuations.

By understanding these key aspects of the Union Budget 2024, students preparing for competitive exams can make informed decisions about their investments and portfolio strategies.

Historical Context:

The Union Budget of India is an annual event where the government presents its annual budget to the Parliament. The budget outlines the government’s plans for the country’s economy, including taxation, spending, and revenue generation. The budget is a crucial event that has a significant impact on the Indian economy and the stock market. The budget is usually presented in February or March of every year.

In recent years, the Indian government has been focusing on increasing the country’s infrastructure development, power generation, and defence spending to boost economic growth. The government has also been working to reduce the fiscal deficit, which is the difference between the government’s income and expenditure.

The Reserve Bank of India (RBI) has been playing a crucial role in the country’s economy, and its dividend has been a significant contributor to the government’s revenue. The RBI’s dividend has been increasing over the years, and it is expected to continue to do so in the future.

The Indian economy has been growing at a steady pace, and the GDP (Gross Domestic Product) has been increasing. The GDP target for FY25 is expected to be in the 7-8% range, which is a significant increase from the previous years.

Summary in Bullet Points:

• The Union Budget 2024 is expected to be fiscally prudent yet expansionary.
• Smallcase managers expect a hike in India’s planned capex spending and more budgetary allocations in areas like infrastructure, power, railways, and defence.
• The fiscal deficit target is expected to be further reduced, with a possible revision of 100 basis points to 4.5% by 2026.
• The GDP target for FY25 is expected to be in the 7-8% range, with the GDP crossing the $4 trillion mark.
• Smallcase managers recommend a well-diversified portfolio with exposure to gold, silver, and gilt, and keeping 10-20% cash in the portfolio for buying on dips.
• Investors should not speculate on any specific event but allocate capital for the long term in smallcases with good growth opportunities and reasonable valuations.
• The budget is expected to focus on infrastructure development, power generation, and defence spending to boost economic growth.
• The RBI’s dividend is expected to boost the fiscal deficit target.
• The Indian economy is expected to continue growing at a steady pace, with the GDP target for FY25 in the 7-8% range.