Shares rallied after Finance Minister Nirmala Sitharaman on Monday proposed a sharp rise in capital expenditure for the next fiscal to Rs 5.54 lakh crore, from Rs 4.39 lakh crore in the current financial year.
In broader market, the S&P BSE Mid-Cap index was up 0.51% while the S&P BSE Small-Cap index was up 0.41%.
The market breadth was positive. On the BSE, 1587 shares rose and 1123 shares fell. A total of 188 shares were unchanged.
Union Budget 2021:
Finance Minister Nirmala Sitharaman while presenting the Union Budget 2021-22 today announced that fiscal deficit in FY21 is pegged at 9.5% of GDP. Meanwhile, the FY22 fiscal deficit target is at 6.8% of GDP. "Will need another Rs 80,000 crore for which we will approach the market in next two months," FM said. FY22 gross borrowing target is at Rs 12 lakh crore. FM said the government hopes to get to back to fiscal consolidation path by FY26. Fiscal deficit will reach below 4.5% by FY26.
The central government aims to garner Rs 1.75 lakh crore through divestments in 2021-22. All divestments announced so far are to be completed in FY22. BPCL, CONCOR, Pawan Hans, Air India divestments to be completed in FY22.
FM announced voluntary vehicle scrapping policy. Vehicles will undergo fitness tests after 20 years for personal vehicles and 15 years for commercial vehicles. The government has raised the limit for foreign direct investment (FDI) insurance sector to 74% from 49% - with safeguards.
Finance minister said that there is a need to clean up bank books. She announced Rs 20,000 crore in FY22 for recapitalisation of public sector banks. The government will allow sale of distressed assets to Alternate Investment Funds (AIFs). Further, asset reconstruction and management company will be set up for stressed assets. The NCLT framework will be strengthened to implement e-courts. Urban Swachh Bharat 2.0 Mission is to be launched at outlay of Rs 1.41 lakh crore over 5 years. Finance minister announced an outlay of Rs 2.87 lakh crore for Jal Jeevan Mission.
FM laid out a Rs 64,180 crore spending plan for healthcare over the next six years. FM further added that this will be in addition to National Health Mission.
The FM said HAI and PGCIL will set up INVITs will attract global funds. A national monetizing pipeline for brownfield assets will be set up.
Finance Minister Nirmala Sitharaman said: To further augment road infra, more economic corridors are being planned. FM announced 3,500 km of national highway works in Tamil Nadu at an investment of Rs 1.03 lakh crore, 1,100 km of national highway works in Kerala at an investment of Rs 65,000 crore and 675 km of highway works in West Bengal at a cost of Rs 25,000 crore.
FM said it will allocate Rs 1.1 lakh crore to Indian Railways in FY22. Of total Rs 1.07 lakh crore of provision to Indian Railway in FY22 is for capital expenditure. FM said the budget will also support augmentation of public bus transport. Rs 18,000 crore will be provided to support bus transport scheme.
Sitharaman also announced the addition of 100 cities to the City Gas Distribution network boosts stocks. Pipelines of GAIL (India) Ltd, Indian Oil Corp (IOC) and HPCL will be monetised, says FM in Budget for 2021-22.
FM said the Government of India has set aside Rs 15,700 crore for small and medium scale enterprises. The Government has also set up credit target of Rs 16.5 lakh crore for FY22. FM said the government will also develop five major fishing harbours to hubs for economic activity.
FM announced reduction in customs duty uniformly to 7.5% on semi, flat and long products of non-alloy, alloy and stainless steel. FM also announced exemption duty on steel scrap till March 2022 To provide relief to copper recyclers, reducing duty on copper scrap from 5% to 2.5%
Further, Sitharaman announced that senior citizen above 75 years of age with only interest income will not have to file income tax return.
Buzzing Segment:
Shares of city gas distributors (CGD) were in demand after central government announced plans to add another 100 cities to the city gas distribution network. Indraprastha Gas (up 1.84%), Adani Total Gas (up 1.31%) and Mahanagar Gas (up 1.04%) edged higher while Gujarat Gas declined 1.62%.
Numbers to Track:
In the foreign exchange market, the partially convertible rupee depreciated to 73.0750 compared with its previous closing of 72.96.
The yield on 10-year benchmark federal paper rose to 6.034% from its previous closing of 5.949%.
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