Union Budget 2022: According to a recent report by Edelweiss, in the Budget 2022-23, the Finance Minister will be seen striking a balance between supporting recovery and maintaining financial discipline. This is because the recovery of the domestic economy so far has been uneven and the recovery in the economy requires policy support. Apart from this, India is preparing to join the Global Bond Index soon, which requires financial discipline and control. Given this, Edelweiss estimates that we may see mild consolidation in FY 2023.
For its analysis, Edelweiss Alternative Research has analyzed the performance of Nifty 50, Nifty Bank and Nifty Midcap 100 on budget day in the last 10 years. It has come out of this analysis that these indices have seen the biggest increase on the day of Budget 2021.
In 2021, the Nifty had run up about 5 per cent. On this day, the announcements of the Finance Minister got huge thumbs up from the investors. However, on the day of Budget 2020, due to not being announced as expected, the Nifty had seen a fall of more than 2 percent.
Similarly, in 2019 also the budget was presented twice. The Nifty had lost 1.1 per cent on the budget day of 5 July 2019 while the Nifty gained 0.6 per cent on the budget day of 1 February 2019. In this way, if we look at Bank Nifty, on the budget day of February 1, 2021, Bank Nifty ran 8.3 percent while on the budget day of February 1, 2020, Bank Nifty lost 3.3 percent. On the budget day on February 1, 2018, Bank Nifty slipped 0.6 per cent.
Edelweiss has said in its report that the upcoming budget will not be very effective from the market perspective. The reason for this is that many challenges have arisen in the background. In the medium term, other factors such as the performance of the companies, economy and financial position will be more important for the market. If the allocation for rural areas is increased in the budget, then we can see an increase in consumption. Which can benefit the consumption-linked stocks included in our portfolio.
Significantly, the Union Budget will be presented in the Parliament on February 1, 2022 at 11 am. Before this, the Economic Survey will be presented on January 31 in the afternoon.
Edelweiss believes that in the upcoming budget, the focus of the Finance Minister can be on increasing the spending on the ruler sector, expanding the scope of PLI schemes, tax cuts of 2019, expanding to new production units. In this budget, the Finance Minister can be seen avoiding any big tax cut.
Also read: Budget 2022: Know from Wealth Manager Ankit Yadav what can happen in Nirmala Sitharaman’s box this time
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