India’s annual budget is one of the nation’s most closely watched events — not just for the numbers, but for the political message during a speech that runs for about 90 minutes.
The thrust of Wednesday’s speech by Finance Minister Arun Jaitley for the fiscal year starting April 1 was on rural and infrastructure spending after advisers warned of a steep slowdown triggered by Prime Minister Narendra Modi’s cash ban. Here are the winners and losers.
*Farmers — Pledges a record agricultural credit of 10 trillion rupees by the fiscal year through March 2018; 480 billion rupees allocated for its rural job guarantee program; electrification of villages. Companies that may benefit include tractor makers such as Mahindra & Mahindra Ltd.
*Real estate — Proposes extension of affordable housing program to five years; gives the sector infrastructure status. Plans to also lower holding period for taxing capital gains on sale of immovable property to two years from three. Shares of DLF Ltd., Godrej Properties Ltd. and Oberoi Realty Ltd. could be affected.
*Consumer goods and automakers — Jaitley proposed cutting the tax rate for people with income of between 250,000 rupees and 500,000 rupees to 5% from 10%, leaving more cash in the hands of consumers to spend more on toiletries, household goods, cars and two-wheelers. Shares that may be affected are ITC Ltd., Hindustan Unilever Ltd., Marico Ltd., Maruti Suzuki Ltd. and Hero MotoCorp Ltd.
*Banks — Government proposes to inject at least 100 billion rupees of capital into state-owned lenders and provide additional capital. Also proposed increasing allowable provisions for bad loans. Stocks involved include State Bank of India, Bank of India, Bank of Baroda.
*Drug makers — As part of the rural focus, government proposes to amend rules governing pharmaceuticals to help lower prices, make healthcare affordable and encourage generics. Stocks affected include Dr. Reddy’s Laboratories Ltd. and Sun Pharmaceutical Industries Ltd.