All Information we want know about Upcoming Union Budget 2023

by Libord Group One-stop Financial Services

Introduction: We are just one week away from the Union Budget being announced by FM Nirmala Sitharaman. This is the time when people feel that budgets should be prepared according to the needs of the middle class, as they have limited income to spend, and according to the current prevailing situation, which is none other than recession. As a result, it is more difficult for the average person to adjust to it.

Definition of Budget: Before going deep into study about budget 2023 first let’s understand meaning of budgets – Budget simply means planned expenditure to made within a specific period of time in order to save your income. In a similar way a Union budget means that it is an estimation of revenue and expenditure of the Central Government over a specified period of time which is usually one year.

This year, following themes will be in mind to make this budget more Appling: -

· Capex – private investment remains strong in India despite global volatility, the government is incentivizing domestic manufacturing and defence indigenization and private sector is seeing capex in energy transformation, emerging tech and warehousing.

· Budget – with the budget coming in the beginning of 2023, the sectors that the government is looking to focus on like – manufacturing, defence, sustainability, railways, public sector banks are already seeing fresh investments

· Banking Sector Improvements – Asset quality, corporate loan portfolios and earnings have improved for public sector banks. PSB’s strong performance will be supported by higher margins, continued credit growth and improved trade debt over the next few years

Focus for this year in Budget: This time, the government may focus on increasing its fiscal deficit, which is defined as the difference between a government's income and spending and is currently 5.9% of GDP. According to experts, if the fiscal deficit becomes more than 6% of GDP, it will not be a good sign for the markets to digest it, as in a developing country like India, a fiscal deficit of 3/4% is considered to be good for the economy. This is said to be the peak time for the fiscal deficit in its increment, and we need to consolidate it as the economy will focus on improving the ease of living, job creation, access to infrastructure, and availability of amenities. Controlling the recession is a big question, but in India it is said to be in a stable mode as compared globally.

Reason for fiscal Deficit in Budgets: During COVID, the government ran the Free Food Scheme (under Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY)) until December 2022, resulting in a fiscal deficit. This was implemented by the Government of India in response to the COVID-19 pandemic, under which it has been distributing 5 kilogrammes of wheat or rice per person per month to eligible beneficiaries. So, the government is now planning to fill that gap, as the economy is now back on track, but one problem remains: the recession, and all other problems are now becoming flatter.

Reason for markets to get boosted in this Budgets: According to expectations, this budget will be the best yet, providing a much-needed boost to the market and economy. Since this is the final budget before the elections, we believe that the government may take some risks going forward. According to tax collection data published on January 10 of this year, direct tax collection stood at Rs 14.71 lakh crore, which is up by 24.58 percent from the same period last year. This is pointing towards India's huge consumption capability. This is why we believe that this budget could give the market and economy a much-needed boost.

Heading towards concentration for sectors and stocks to be in focus for this budget session according to experts in market along with their reasons so sit tight and enjoy this article reading: -

Now this time theme for the budget could be PSU banks, capital goods, and infrastructure. The reason we feel these sectors might be in focus is due to following reasons: -

According to the recent data Nifty PSU Bank Index and the Nifty Infrastructure Index are alone up by +74.67 percent and +7.49 percent, respectively, in 2022. Therefore, we believe PSUs will be in focus. Similarly, capital goods and infrastructure are two other sectors to be excited about because they are also anticipated to benefit from government expenditure. Therefore, we are highly optimistic about PSUs and infrastructure. But that does not mean that Nifty Private banks have not shown improvement according to the recent data Nifty Private banks have Nifty Private Bank Index has alone generated about a +22 percent, return in 2022 which has made markets to outperform and be competently managed. But the way PSU Banks have turned the table of investing last year 2022 we can expect this counter becomes high in expectation and moreover this counter is in running on discount which makes more suitable for investors to choose this sector when compared to Nifty Private sectors.

Now PSUs, capital goods, infrastructure, sugar, and hotels look good in this year 2023 as we have read above PSUs, capital goods, and infrastructure now reason for Sugar stocks is that the government’s firm stand to support ethanol production makes us feel that the stocks are expected to gain momentum in this year 2023. Moreover, we have witnessed enough beatings have been taken by the hotel industry as during COVID 19 period tourism was mainly affected but now after 2021 period we witnessed that slowly silently people are travelling back again which makes this sector to get fit into our list of investment.

Apart from this we also feel that Steel sector also to be in focus as after China has lift up COVID 19 restrictions we are bullish on this counter to show some improvements in upcoming days

At last Reason we Indian Economy to be strong in compare to globally: The reason when we say that Indian Economic is stronger than that of other countries can be explained in this stanza as when we compare our Index with the US’s major indexes, we found some interesting facts which is US S&P 500 and NASDAQ-100 have seen a major drawdown in 2022, with S&P 500 falling by -19.44 percent and NASDAQ-100 falling by a staggering -33 percent whereas Indian indices Nifty 50 had gained a +5.69 percent comparatively. This is the time when Globally world was fighting with a situation of Inflation, Rate hike, Stagflation, Recession and more over unexpected war situation which was between Russia and Ukraine. This clearly indicates that Indian markets will continue to outperform the global market going forward. Therefore, this is the ideal time to act aggressively rather than wait for market corrections in simple words.