Budget 2018: Know which sector gets a thumbs-up

  • | Thursday | 1st February, 2018

Finance minister Arun Jaitley presented the Union Budget 2018. This was Narendra Modi-led government’s fifth budget in Parliament. Know the major highlights and which sector gets a thumbs-up and who got a thumbs-down.

Finance minister Arun Jaitley presented the Union Budget 2018. This was Narendra Modi-led government’s fifth budget in Parliament.

Jaitley started his budget speech addressing agriculture distress, unemployment and ways to boost growth in the Indian economy while sticking to fiscal prudence.

In the budget, India`s farmers and villagers, as well as companies with exposure to agriculture, emerged as the biggest winners while bond investors might just be the biggest loser.

Here are the sectors which get a thumbs-up from the Union Budget 2018

Farmers

Troubled farmers have been protesting in different parts of the country. This budget promised to increase the minimum price offered to farmers for crops, and spending in agriculture. It will also deliver more wages for rural areas which includes irrigation projects, aquaculture projects, and directs state governments to buy extra solar power generated by farmers using solar-powered pumps. Agriculture-focused companies such as Avanti Feeds Ltd., Irrigation Systems Ltd., Shakti Pumps India Ltd., PI Industries Ltd. Jain Kirloskar Brothers Ltd., Waterbase Ltd., JK Agri Genetics Ltd., KSB Pumps Ltd., could be benefited.

Transport Companies

Jaitley promised to record infrastructure spending on roads and railways, construction and engineering firms, as well as train wagon-producers, could gain profit from it. Companies like Larsen & Toubro Ltd., Hindustan NCC Ltd., IRB Infrastructure Developers Ltd., Titagarh Wagons Ltd., Construction Co Ltd., Dilip Buildcon Ltd., and Cimmco Ltd could be in the list.

Consumer Companies

With boost on the expenditure on India`s vast hinterland, fast-moving consumer goods companies such as Marico Ltd., Britannia Industries Ltd. and Hindustan Unilever Ltd., could assist as day labourers acquire jobs and disposable income. Companies with rural exposure include Mahindra & Mahindra Ltd., Hero MotoCorp Ltd., Larsen & Toubro Ltd.

Health Care Providers

National Health Protection Scheme, Government`s new flagship intends to make sure as much as 500 million people for up to 500,000 rupees a year of care. This could profit companies such as Apollo Hospitals Enterprise Ltd., India`s largest hospital company, as well as Fortis Healthcare Ltd.

Jewelers

With 60 percent of gold demand coming from rural India, budget focus on improving rural and farm incomes benefiting companies such as Titan Co Ltd., PC Jeweller Ltd, Tribhovandas Bhimji Zaveri Ltd.

Airports

With the government pledging to expand regional airport construction, firms such as GMR Infrastructure Ltd. and GVK Power & Infrastructure Ltd. could gain benefit.

Here are the sectors which get a thumbs-down from the Union Budget 2018

Electronic Goods

To boost domestic manufacturing, Jaitley`s budget lifts customs duty on mobile phones to 20 percent from 15 percent. This might lower returns for Apple Inc. and Samsung Electronics as they look for profits in one of the world`s fastest-growing mobile phone markets -- or force them to pay out to set up local factories.

Bond Investors

Bond investors caught some relief from a lower than expected borrowing program. Nonetheless, the relief can prove to be short-lived. India failed to spot its fiscal deficit target of 3.2 percent, pronouncing its target as 3.5 percent for fiscal 2019. Big bond investors like Indian state-owned banks could be thumped as yields go even higher than the 96 basis points they climbed in the past six months, the most in Asia. The shares of Bank of Baroda, HDFC Bank LtdAxis Bank Ltd., ., ICICI Bank Ltd., State Bank of India, and Punjab National Bank might also be affected.

Financial Sector

The government`s conclusion to enforce long-term capital gains tax on equity investments may bend investor sentiment for financial services companies, life insurers and providers of mutual fund products.

Defense Sector

Jaitley admired the armed forces and affirmed an industry-friendly policy to encourage defence production as he addressed parliament. But there was no hint of an extravagant boost to defence spending.


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