The 2022 budget is to be presented on 1st February 2022 in Parliament. All stakeholders will be glued to their screens keen to know what is in store for the upcoming financial year. The stock market is expecting policies and announcements to be made which will have a positive impact for investors on the stock market.
The policies set by the government will have an effect on the overall economy. Will it have an effect on the stock market as well? Let us discuss.
What the Stock Market is Expecting
Stock market experts are expecting a budget that will be inclined towards pre-covid era ecomonic growth, and have necessary reforms to compensate for the loss caused to the economy due to the pandemic.
It is also expected that high fiscal expenditure focussing on infrastructure with a prime focus on the auto and real estate sector as these sectors are responsible for jobs and growth in several other sectors of the economy will be a part of the Budget.
Furthermore, they also suggested they’d want to raise the tax benefits related to housing loans as this has not been altered in the last several years. The salaried class is a major investor in the stock market and introductions of relief towards this segment will be highly welcomed by the stock market.
Top Stocks and Sectors to Look Out
Stock market experts are bullish when it comes to some of the stocks and sectors as they are expecting the budget 2022 to help these sectors to see accelerated growth and a much-needed push from the government.
It is highly possible that infrastructure will get a significant slice of the government focus. This will be primarily focused on roads, healthcare infrastructure, highways, civic amenities, and much more. With elections scheduled in several states of India, agriculture may also be featured in the Finance Minister’s budget.
The government has also a long term goal of popularising renewable sources of energy and pollution-free mobility. The players of this sector are also expecting positive policies in the budget in the form of tax breaks.
The hospitality, SMEs, transportation and rural sectors have been severely impacted by the pandemic, it is expected that the Union Budget 2022, will have several policies for their revival.
Impact of the Budget 2022 on the Stock Market
It is very obvious that the budget will impact the stock market. The budget 2022 is one of the most anticipated budgets in modern times due to the financial effects on the market caused in the last two years.
It will be important for the budget to include policies that will not only push the growing sectors on the route to growth but will also require it to have aid and much-needed help to the sectors that have been severely impacted. The market will accordingly rise or fall.
The stock market would want the budget to include aspects that will increase the wealth of the common man who invests in the stock market.
The effect of the budget will be seen the day the budget is actually rolled out.
Conclusion: Budget 2022, like all previous budgets, will have an effect on the stock market. However, this year the stock market has expectations from the budget due to the financial impact of COVID-19. It will be interesting to see the results once the budget is actually rolled out.
Do check out our detailed analysis on ‘Budget 2022’ here –
FAQs on the Indian Budget 2021
How much did the 2021 budget allocate for infrastructural developments?
The 2021-22 budget saw a fund of INR. 1.77 lakh crore for infrastructural development. The fund will be utilised to build roads, highways, provide credit to MSME, and ensure that safe drinking water is provided as per Jal Jeevan Mission. It also is to be used to develop the National Bank for Financing Infrastructure and Development.
What was the allocation towards the health sector in the 2021 budget?
Yes, the health sector received an increase of 137% of allocation due to the pandemic. 35,000 crore were allotted for the vaccination process.
Was the 2021 budget an expenditure budget? What does it mean?
Yes, the 2021 budget was an expenditure budget. This refers to a budget that showcases the capital disbursements and revenue of the government’s various departments and ministries. It offers a comprehensive analysis of the numerous expenditures and the reasons for it.