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<ul><li>Market is hoping that the government will continue with its push for schemes like Atmanirbhar Bharat, Make in India, and the PLI.</li><li>Capex spending is not expected to be as high as FY24 but is expected to be in the range of 10-20% higher than the year before.</li><li>Along with infra push, rural economy driven schemes are expected to receive allocations as it has been under the cloud of a weak monsoon. </li></ul>Union finance minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> set the stage for low expectations from the upcoming Interim Budget, insisting that there would be no spectacular announcement. The interim budget allows the incumbent government to undertake expenditures till a new government is formed after general elections. The stock markets too have not been expecting much from it either. After BJP’s wins during state elections drove a rally, they hope the government will keep pushing along the path of fiscal consolidation. Investors expect the government will provide impetus to key policy reforms such as Atmanirbhar Bharat, Make in India, and the PLI scheme in FY25. “The impact of the Union Budget on the equity market has reduced notably over the past few years, with the government undertaking most of the reforms outside the purview of the Budget. Nonetheless, the market participants continue to view it as a critical catalyst stimulating the growth of the Indian economy and, thereby, the Indian market,” said <keyword id="20204942" type="General" weightage="20" keywordseo="pranav-haridasan" source="keywords">Pranav Haridasan</keyword>, MD and CEO, Axis Securities. The Big Question of public capex The Indian government’s capex push in FY24 has aided large-scale infrastructure growth. This helped mid and small cap companies gain ground as private capex is still elusive. Any announcements on this side could be market movers. “Major public capex is unlikely since the FM has to achieve the fiscal deficit target of 5.9% for FY24 targeted in the 2023 budget. Also the massive public expenditure done through the budget provision last year has helped in triggering growth in the Indian economy. Therefore, the government’s priority would be to achieve fiscal discipline,” opines Dr V K Vijayakumar, chief investment strategist at Geojit Financial Services. While the FY24 Union Budget saw a 35% rise in capex spending, this time the market hopes it to be anywhere around 10-20%. Its focus is likely to continue to be on infrastructure like roads, water, metro, railways, defense, digital infrastructure, and green technologies. All which will drive investment-driven growth. Driving the rural economy A few experts also believe that the government might give the rural economy a much needed push as it’s not fully recovered from the pandemic. Particularly because buoyant tax collections have kept India’s fiscal situation of FY24 in a good stead. “We expect the government to stick to its path of fiscal consolidation, without compromising on quality of expenditure. In the wake of weaker monsoon and pressure seen in Rabi sowing season, focus will be on providing support to rural growth. Important schemes such as PM-KISAN, MGNAREGA, Housing for all, free food grains, will continue to hold significant importance,” said <keyword id="20368299" type="General" weightage="20" keywordseo="sonal-badhan" source="keywords">Sonal Badhan</keyword>, economist at Bank of Baroda. If the rural economy gets a boost, it will be a positive for FMCG majors like HUL, Marico, Dabur whose volume growth has been sluggish for the last few quarters. It will also aid as well as <keyword id="19983534" type="General" weightage="20" keywordseo="hero-motocorp" source="keywords">Hero Motocorp</keyword>, M&amp;M, while continued infra push can be good news for L&amp;T, RVNL, IVRCL, Tata Power and more. Market experts also believe that if the government tightens its belts, and chugs along the path of fiscal discipline, it spells good news for global investors. Marzban Irani, CIO, Fixed Income at LIC Mutual Fund Asset Management worries that popular measures ahead of the elections may play spoilsport. "Normally, we do not expect any path breaking policy announcements in an interim budget. But there is always scope for unconventional moves. In my view, the Centre should try to adhere to the fiscal deficit target as it gives a clear signal to global investors,” Irani added.

Interim Budget 2024: Markets don’t expect big bang measures but hope infra & rural push to continue

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Interim Budget 2024: Markets don’t expect big bang measures but hope infra & rural push to continue

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