On 4 February 2023 finance ministers Nirmala Sitaraman present in the union budget of 2023 to the lok sabha and policy I got it tell you that the budget is by far the most important economic event that every citizen must follow and understand because it affects everything starting from your taxes your home loans your stock portfolio and even the cost of tomatoes that you buy and because business is in India is filled with jargons that don’t can understand.What is the Indian government strategy behind this year which are the key sectors and stocks that will be affected due to the budget changes what are the tax changes made by the government.
Is the purpose of a budget people in simple words just like a company has to project it’s income expenses and the most important growth parameters that its going to when it comes to a country has to come out with the budget that focuses on 3 parameters
1) how will and how much revenue with the country generate in a year
2) how will and how much expenses will the country incorreino
3) what are the most important factors that the government will be heavily investing into
Heavily investing into now for this year’s budget the major focus has been on three important aspects
1) fiscal consolidation
2) tremendous increase in capital expenditure by the government
3 )the changes and repeat in the new income tax regime
Like you need money to Run company even to run a government you need to spend the lord of money in all to achieve two important outputs
1) buildconduce ecosystem for businesses to flourish
2 )achieve welfare for the people of the country
Government of India spend 60000 crores to build something called the golden quadrilateral Highway this Highway connects 4 major cities Delhi Mumbai Chennai and Kolkata and this project that was built in 2012 now it is giving a huge business goes to Mundra Port which is connected to the highway of the golden quadrilateral so trade and transportation has actually become simplar and factories in all four cities actually have a huge advantage by which faster and cheaper this is all by investing into the highways the the government makes it is your and cheaper for businesses to florish and eventually then these business or more income the government collects more taxes from these businesses similarly the government is located two lakh crores to make food grains freely available for 81.35 crore people under the national food security act this all though doesn’t lead to direct economy output it is meant to improve the lies to people of the country these other two output of the government names common names to achieve which are economic growth and citizen welfare.
Now this back the question where is the government get all these money to spend on highways and food welfare schemes well ? this is where we have the government sources of revenue ensure firstly we have the taxes which are the most significant source of revenue for the comment and he was wear We have income tax sales tax property tax corporate tax etc.
second leave we have fees and charges which comes from
licence fees
Permits
Fines
– Sales of goods and services government generates revenue through the sale of land public utilities or other assets then the government also earns from investments in stocks bouncer other financial instruments and lastly we have the royalties of the government actually receives from natural resource extraction such as oil and gas
Now if this revenue is more than its pending then the economy said to be a surplus economy and if the spending is more than the revenue then it is known as a deficit economy
so if you look at India in 2022-23 are government spending is 39,44,909 crore rupees and the revenue is 22,83,713 crore rupees so we have a definite economics 16,61,196 crore rupees and this difference between spending and revenue is what you called as physical deficit is usually calculated as as a percentage of GDP.
Well this is a reason why India takes loans from other countries from bonds and international bodies to make a for this physical deficit and this is not just something that India does this is something that every other country does so right now the Indian government has taken loan from Asian development Bank international development association international Bank for reconstruction and development and the international fund for agricultural development.
This is a reason why the government actively works very hard to decrease the fiscal deficit and this act of reducing the deficit is what is known as fiscal consolidation so if you get a physical deficit in the pass 3 years you will see that it is trustely come down from 9.2% to just below 8% and now it’s time at 6.4% and if all goes well this year estimates that we might even hit 5.9% this is the most important objective of this year’s budget that is physical consolidation.
Want the last budget which are the miscellaneous government most that can benefit or affect some important industries and stocks in the market so here 60000 crores or government money going to Jal Se Nal which is said to benefit water engineering procurement and construction stocks like NCC PNC and KNR after that we have reduction and customs duty on cut and polish diamonds from 7.5% to 5% .This would benefit the jewellery sector. So Titan company is a key stock to give an iron because they have TANISHQ.
Thirdly customs due to acidic acid has been reduced from 10% to 5% with my negatively effect a company like GNFC because there the largest producer of acetic acid but it might benefit key stocks like Lakshmi Organic and Jubilan ingrevia similarly decrease of customs due to methanol from 10 to 2.5% might benefits Alkyl amines and Balaji amines and lastly with the government boring in 73000 crores to drive rural consumption if it goes well it will benefit key stocks like actual Dabur, marico and ITC these are the most important from the budget of 2023