Finance Minister Nirmala Sitharaman holding the budget paper on February 01, 2023. , Photo credit: The Hindu
Higher spending, tax cuts and supportive policies announced in India Budget for 2023-24 Fitch Ratings said the outlook is expected to support continued demand growth and improve the long-term outlook for corporates.
Amid expectations of a slower economic growth following the financial year ending March 31, 2023 (FY23), we believe the tax cut will boost consumer sentiment and sustain consumption growth. financial year.
announced cut income tax It states that this will benefit the disposable income of consumers across all income groups.
Under the new income tax regime introduced in 2020, the income tax exemption limit available to salaried and individual taxpayers has been increased from the current Rs 5 lakh to Rs 7 lakh.
Besides, the rating agency said a large budget allocated for infrastructure and a good performance record of the government over the past few years augurs well for sectors such as cement, steel and construction.
For the record, the budget document proposes to increase capital expenditure expenditure 33% to ₹10 lakh crore, focusing on increasing core infrastructure assets including roads, railways, airports and logistics.
“Planned capex is more than double of the expenditure in FY11 and more than three times in FY19, underscoring the government’s focus on boosting the country’s infrastructure,” it noted.
“The growth in demand from the infrastructure end-market – which accounts for between 25-30% of cement demand – will be positive as we see it as a more stable end-market than housing.”
Cement and steel demand will also benefit from a 66% increase in spending allocated to the government’s program to provide concessional loans for affordable housing under the Pradhan Mantri Awas Yojana (PMAY). Plan, The outlay of PMAY has been increased by 66% to Rs 79,000 crore, Finance Minister Nirmala Sitharaman announced while presenting the Union Budget 2023-24 in Parliament.