Union Budget 2024: A Guide for Competitive Exams

As the Union Budget 2024 approaches, students preparing for competitive exams should be aware of the key expectations and sectors to watch out for. The budget is expected to bring about transformative changes in various sectors, including infrastructure, defence, rural development, healthcare, taxation, and more. These changes aim to catalyse economic growth, enhance social welfare, and bolster various sectors, aligning with India’s vision for comprehensive development and prosperity.

Infrastructure Development

The budget is expected to focus on increased capital expenditure on infrastructure sectors like roads, power, urban development, and railways. This strategic allocation aims to stimulate economic growth, create employment opportunities, and foster long-term economic multipliers. Stocks like Larsen & Toubro (L&T), KNR Constructions, and PNC Infratech are poised to benefit from increased infrastructure investments.

Railway Spending

Significant investments are anticipated in expanding and modernising railway infrastructure, encompassing new lines, station redevelopment, and the introduction of modern trains. Stocks such as IRCTC, Container Corporation of India, and Titagarh Wagons are likely to gain traction in response to heightened railway sector allocations.

Affordable Housing and Urban Development

Funding allocations are expected for affordable housing and satellite township development near metro cities to bolster urban infrastructure and enhance access to affordable housing. Real estate stocks like DLF Ltd., Godrej Properties, and Oberoi Realty are poised to capitalise on these developments.

Defence Modernisation

The budget is expected to increase defence budgetary allocations to support armed forces’ modernisation efforts, emphasising technology acquisition and indigenisation. Defence manufacturers like Bharat Electronics Ltd. (BEL), Hindustan Aeronautics Ltd. (HAL), and Bharat Dynamics Ltd. (BDL) are expected to benefit from enhanced defence spending.

Farmer Support and Agri-Infrastructure

Expectations include higher Minimum Support Prices (MSPs) for major crops, strengthened agricultural infrastructure, and support for PM Kisan Samman Nidhi. Stocks to watch in this sector include Mahindra & Mahindra Ltd., Escorts Ltd., and UPL Ltd.

Support for Startups and MSMEs

Anticipated expansions in credit programs like Mudra loans and initiatives such as the Startup India Seed Fund Scheme are expected to bolster startup ecosystem and MSME growth. Financial services and IT sectors, represented by stocks like HDFC Bank Ltd., Kotak Mahindra Bank Ltd., Tata Consultancy Services (TCS), and Infosys Ltd., are likely to benefit from these initiatives.

Job Creation through Public Welfare Schemes

The budget is poised to emphasise infrastructure projects and public welfare schemes as key avenues for generating employment, particularly in rural areas. Sectors like construction, IT, and services are expected to benefit significantly. Investors eyeing this development should keep an eye on stocks like Larsen & Toubro (L&T), Tata Consultancy Services (TCS), and Infosys.

Healthcare Initiatives

The budget is expected to continue the expansion of the Ayushman Bharat scheme and enhance focus on healthcare services for women and senior citizens. Stocks like Apollo Hospitals Enterprise, Fortis Healthcare, Sun Pharmaceutical Industries, and Cipla are poised to benefit from heightened government support and expenditure.

Renewable Energy Investments

Anticipated increases in investments in renewable energy sources, including solar and wind power projects, are set to drive clean energy technologies forward. Stocks like Tata Power Ltd., Adani Green Energy Ltd., and NTPC Ltd. offer potential growth opportunities for investors interested in green initiatives.

Green Initiatives

Support for green hydrogen projects and sustainability-focused infrastructure, including incentives for battery energy storage systems, is expected to feature prominently in the upcoming fiscal agenda. Investors interested in sustainability projects may consider stocks like Inox Wind Ltd. and Suzlon Energy Ltd.

Personal Income Tax

Expectations for revisions in income tax slabs to provide relief to the middle class are high, with potential increases in basic exemption limits and adjustments to tax thresholds anticipated. Sectors benefiting from increased consumer spending, including consumer goods and retail, may see potential growth opportunities for stocks like Hindustan Unilever, Nestle India, Marico, Avenue Supermart, and Titan Company.

Corporate Tax

Anticipations include potential reductions in corporate tax rates for MSMEs to bolster growth and sustainability. Investors monitoring this sector may consider stocks like HDFC Bank, Kotak Bank, and Axis Bank, which are well-positioned to capitalise on a competitive tax environment aimed at attracting investments and boosting industrial growth.

As students prepare for competitive exams, it is essential to stay updated on the key sectors and expectations outlined in the Union Budget 2024. By understanding these changes, students can better navigate the complexities of the Indian economy and make informed decisions.

Historical Context:

The Union Budget is an annual financial statement presented by the Government of India to the Parliament, outlining the country’s financial plans and policies for the upcoming fiscal year. The budget is a crucial document that sets the tone for the country’s economic growth, development, and social welfare initiatives. The budget is typically presented by the Union Finance Minister in February or March of every year.

The Union Budget 2024 is significant as it comes at a time when India is recovering from the COVID-19 pandemic and is looking to accelerate its economic growth. The budget is expected to focus on infrastructure development, defence modernization, affordable housing, and healthcare initiatives, among other sectors.

Summary in Bullet Points:

• Infrastructure Development:
  • Increased capital expenditure on roads, power, urban development, and railways
  • Stocks to benefit: Larsen & Toubro (L&T), KNR Constructions, PNC Infratech
• Railway Spending:
  • Significant investments in expanding and modernizing railway infrastructure
  • Stocks to benefit: IRCTC, Container Corporation of India, Titagarh Wagons
• Affordable Housing and Urban Development:
  • Funding allocations for affordable housing and satellite township development
  • Stocks to benefit: DLF Ltd., Godrej Properties, Oberoi Realty
• Defence Modernisation:
  • Increased defence budgetary allocations for technology acquisition and indigenisation
  • Stocks to benefit: Bharat Electronics Ltd. (BEL), Hindustan Aeronautics Ltd. (HAL), Bharat Dynamics Ltd. (BDL)
• Farmer Support and Agri-Infrastructure:
  • Higher Minimum Support Prices (MSPs) for major crops
  • Strengthened agricultural infrastructure and support for PM Kisan Samman Nidhi
  • Stocks to benefit: Mahindra & Mahindra Ltd., Escorts Ltd., UPL Ltd.
• Support for Startups and MSMEs:
  • Expansions in credit programs like Mudra loans and initiatives like Startup India Seed Fund Scheme
  • Stocks to benefit: HDFC Bank Ltd., Kotak Mahindra Bank Ltd., Tata Consultancy Services (TCS), Infosys Ltd.
• Job Creation through Public Welfare Schemes:
  • Infrastructure projects and public welfare schemes as key avenues for generating employment
  • Stocks to benefit: Larsen & Toubro (L&T), Tata Consultancy Services (TCS), Infosys
• Healthcare Initiatives:
  • Expansion of the Ayushman Bharat scheme and enhanced focus on healthcare services for women and senior citizens
  • Stocks to benefit: Apollo Hospitals Enterprise, Fortis Healthcare, Sun Pharmaceutical Industries, Cipla
• Renewable Energy Investments:
  • Increases in investments in renewable energy sources, including solar and wind power projects
  • Stocks to benefit: Tata Power Ltd., Adani Green Energy Ltd., NTPC Ltd.
• Green Initiatives:
  • Support for green hydrogen projects and sustainability-focused infrastructure
  • Stocks to benefit: Inox Wind Ltd., Suzlon Energy Ltd.
• Personal Income Tax:
  • Revisions in income tax slabs to provide relief to the middle class
  • Stocks benefiting from increased consumer spending: Hindustan Unilever, Nestle India, Marico, Avenue Supermart, Titan Company
• Corporate Tax:
  • Potential reductions in corporate tax rates for MSMEs to bolster growth and sustainability
  • Stocks to benefit: HDFC Bank, Kotak Bank, Axis Bank