On 1st February 2022 Finance Minister Nirmala Sitharaman will announce her fourth Budget, which is speculated to be a growth-oriented one. Experts say this Union budget 2022 could see the Finance Minister announcing plans for higher capital expenditure outlay on healthcare schemes and to ignite India’s CAPEX cycle, which is aimed at boosting India’s inclusion in the global supply chain.
Currently, sectors such as housing, autos, and auto ancillaries are expecting major support and PLI-related measures. Experts say that some relaxation in taxes and waivers in GST could be expected in real estate to boost the sector. This year, the budget is expected to push many right buttons to get the economy back on track from downfalling.
From a market point of view, trade, agriculture, private investment and government spending are above pre-pandemic level, yet the biggest driver for our economic consumption is below the pre-pandemic level. It clearly means that there is a need to support consumption through this budget, especially at the bottom end of the hierarchy.
Secondly, there is a need for tax incentives or some sort of support to the housing sector, since it employs the maximum number of people. The sector is also the least dependent on imports. A small reduction in tax can create a multiplier effect on the economy.and will help liquidate inventories. A variety of things could be done to support housing in the budget 2022 that would create employment at the bottom of the pyramid.
Through this budget, we can also expect that major steps would be taken to achieve the Paris Climate Goal as the Prime Minister has already announced that India would reduce its dependence on fossil fuel energy in the coming years.
Interestingly, India is the only country across the globe that has achieved the Paris Score Target by producing 40 percent energy through renewable sources. Another segment that would benefit from this budget would be commercial vehicle space. If the economy picks up expenditure on capital goods, the infrastructure will grow exponentially.