4 NITI Aayog budget 2017 advice to pitch Indian stock market

Indian stock market has the capacity to discount the effect of the budget on them, prior to any other sector. The bad and the good consequences of budget allocation to vivid sectors reflects in listed stocks of that particular sector. And the recent discussion and suggestions of Niti Aayog hint on the probable allocation of the budget on different sectors.

Highlights

• Government is committed to double farm income and it is positive for agriculture and allied sector
• Emphasis on rising income level and tax rationalization will be positive for Consumer durable, FMCG and auto sector
• More budgetary allocation towards digitization drive will be positive especially for information technology and electronics sectors
• More budgetary allocation on larger job creation will boost both service and manufacturing sector.

A detailed discussion on the Niti Aayog’s discussions and recommendation relating to Budget 2017 have been presented in the blog entitled “7 Niti Aayog Budget 2017 Advice to Fillip Indian Stocks”. Let’s see what these suggestions by expert mean to the Indian stock market.

Budget 2017 may target at doubling farm income

Emphasis on doubling farm income by 2022 will have the positive bearing on sectors dealing with agriculture and allied services. From farm equipment manufacturers to seed processors, pesticides and chemical producers to agricultural produce processors and sellers will largely be benefited along with the farmers.

Government to emphasize tax rationalization and ways to raise income level in budget 2017

More income with the rural population is positive for consumer durables, FMCG, auto and other sectors. Also, the rural population is the largest segment of overall India’s population. Further, this population consumes most of the products from these sectors.

In the budget 2017-18 if the government takes the decision on bringing down the tax rates then it will be a healthy sign for the economy. This will lighten up the pockets of both producers and consumers and hence will result in more income at larger population disposal.

Budget 2017 may priorities India to become a cashless economy

With India commitment towards classless economy will have the positive bearing on electronics and telecommunication sector along with banking. The fast communication system, which will become the backbone of the cashless economy, will not only benefit the economy at large but also will speed up banks and other financial intermediaries business, and hence larger profit to some extent.

Budget 2017 to aim at expanding working population base

More jobs mean larger and wider distribution of income to the population. These population will not only be willing to spend but also will have the capacity to spend. This will certainly help in breaking the vices circle of unemployment and growth.

Overall, the recommendations of the Niti Aayog expects if considered seriously by the budget 2017 committee and implemented will give a positive sentiment to the Indian stock market, across all the sector.

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