Budget 2023: The five factors that may cheer the stock markets

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Here are five aspects of the Union Budget that can provide some cheer to the equity markets:

1. Consumption Boost

The economic survey presented yesterday pointed out that India's economic growth in the current financial year has been principally led by private consumption and capital formation. Rural demand, however, has been on the backfoot, still struggling to find its footing since the pent-up demand from the post-pandemic era faded away.

Most FMCG, consumption-oriented companies barring HUL, have mentioned in their business updates or quarterly results that rural demand continues to remain lower compared to urban demand.

2. Tax Benefits

The one aspect that the middle class always looks up to the budget every year is whether they will be provided any relief towards taxation. It has been eight years since the standard deduction limit has been raised and experts are of the view that this Budget is a great opportunity to bring some reforms in the personal income tax space.

3. Keeping LTCG and Short-Term Capital Gains Tax Unchanged

4. Increased Roads and Rails Capex

The Budget this time is expected to focus on increase in capex for roads and railways.There is an expectation of a 10-15 percent hike in spending for roads and railways to Rs 2.1 trillion.

5. More PLI Schemes, Especially Clean Energy

The numerous PLI schemes announced have covered a wide gamut of sectors and have provided a boost to domestic manufacturing.There would be expectations that the scope for these PLI schemes are widened and cover more areas like clean energy where there has been a lot of emphasis on in recent times.

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