Budget 2022: Good news for mid-cap and small-cap sector companies!

Finance Minister Nirmala Sitharaman announced that the country expects a GDP of 9.2 per cent and this will lay the foundation for economic growth over the next 25 years.

Finance Minister Nirmala Sitharaman announced that the country expects a GDP of 9.2 per cent and this will lay the foundation for economic growth over the next 25 years. Inclusive development, productivity enhancement, energy transition, and climate action would be the four pillars of development. Budget 2022 seeks to lay the foundation to steer the economy over ‘Amrit Kaal’ for the next 25 years, from India at 75 to India at 100, continuing to build on the vision of Budget 2021.   

The government had announced a concessional 15 per cent income tax for new manufacturing companies, with manufacturing to kick start before March 31, 2023. They will now get one more year to start operations i.e. till March 31, 2024. This will be useful for companies, which are planning new projects through separate companies whose plans may have been delayed by the pandemic. The states are set to get long-term interest-free loans outside normal borrowings. This will help the domestic manufacturing and the special economic zone to develop as well as set up factories & other infrastructural developments.   

The ‘Make in India’ initiative will create six million jobs in the coming financial year. Spectrum auction for 5G rollout within FY22-23 is bound to impact the stocks of companies such as Vodafone idea, Bharti Airtel, Reliance which will trade higher. Gati Shakti is the new initiative for the national highway network that will be expanded by 25,000 km in 2022-23, says FM Sitharaman. Stocks impacted will be infra stocks such as L&T, IRB Infra, Ashoka Buildcon, etc.    

High stocks in Manufacturing Index were Sun Pharmaceuticals, Tata Steel, Britannia, UltraTech cement, Vedanta, and Larsen & Toubro. In the capital goods sector, the stocks of Honeywell Automation India, Schaeffer India, Siemens, and ELGI Equipments Ltd are trading at the top.