February 02, 2022
1
Budget 2022-23
Decoded
Sector Analysis - Infrastructure
- The government announced modest increase in allocations to various schemes and departments of Infrastructure;
- Budget for roads was increased by 2% YoY (RE) with total outlay at Rs 20,000 crores. Target is to expand highways by 25,000 km in next financial year (including NHAI).
- Railways saw 17% YoY (RE) increase in allocation and stood at ~Rs 14,000 crores. 2000 km of network and Four hundred new-generation Vande Bharat Trains with better energy efficiency and passenger riding experience will be developed and manufactured during the next three years.
- Ken-Betwa river link (in states of UP/MP) to be executed for Rs 44,000 crores " (Rs. 1,400 crores allocated in FY23BE vs Rs. 4,300 crores in FY22RE). This is aimed at providing irrigation benefits to 9.08 lakh hectare of farmers" lands, drinking water supply for 62 lakh people, 103 MW of Hydro, and 27 MW of solar power.
- Spectrum auctions will be conducted in 2022 to facilitate rollout of 5G mobile services within 2022-23 by private telecom providers.
- The contracts for laying optical fiber in all villages, including remote areas, will be awarded under the Bharatnet project through PPP in 2022-23.
Our preferred stocks: Bharti Airtel, Reliance Industries (Reliance jio), Larsen & Tubro, ABB Power, Hitachi Energy, Titagarh Wagons, Astral.
Sector Analysis - Defense
- The Government is committed to reduce imports and promote Atma-Nirbharta in equipment for the Armed Forces.
- 68% of the capital procurement budget will be earmarked for domestic industry in FY23, up from 58% in FY22.
- Defense R&D will be opened up for industry, startups and academia with 25% of defense R&D budget earmarked.
- Private industry will be encouraged to take up design and development of military platforms and equipment in collaboration with DRDO and other organizations through SPV model.
- In FY23, the allocation to Ministry of Defense is Rs. 5,25,166 crores vs. Rs. 4,78,196 crores in FY22.
Our preferred stocks: Bharat Electronics, Data Patterns, MTAR Technologies.
Sector Analysis - Housing & Urban Development
- In FY23, 80 lakh houses would be built for the PM Awas Yojana's identified eligible beneficiaries and a total of Rs. 48,000 crore has been set aside for this purpose.
- Allocation of Rs. 60,000 crores (Rs. 45,011 crores in 2021-22 RE) has been made under Jal Jeevan Mission with an aim to cover 3.8 crore households in FY23.
- A high-level committee of reputed urban planners, urban economists and institutions will be formed to make recommendations on urban sector policies, capacity building, planning, implementation and governance.
- Five existing academic institutions for urban planning to be designated as Centre for Excellence with endowment fund of Rs. 250 crores each.
- For urban capacity building, support will be provided to the states. Modernization of building byelaws, Town Planning Schemes (TPS), and Transit Oriented Development (TOD) will be implemented. This will facilitate reforms for people to live and work closer to mass transit systems.
Our preferred stocks : Godrej Properties, Ashiana Housing, Kajaria Ceramics, Astral, Finolex Industries.
Sector Analysis - EV & Clean Energy
- Battery swapping policy to allow EV charging stations for automobiles will be framed.
- Private sector will be encouraged to create sustainable and innovative business models for battery and energy as a service, improving the efficiency in the EV ecosystem.
- Energy efficiency and saving measures will be promoted.
- FM announces Rs 19,500 crore allocation in PLI for solar modules.
- The battery swapping policy is a positive measure for electric vehicles (EVs) which will give a boost to the sector and lend to the clean energy segment & faster adoption of electrical vehicles.
Our preferred stocks: Tata Power, Exide Industries, Amara Raja Batteries, Auto OEMS focused on EV like Tata Motors, Sona Comstar etc.
Sector Analysis - Chemicals
Customs duty on certain critical chemicals namely methanol, acetic acid and heavy feed stocks for petroleum refining being reduced; Duty is being raised on sodium cyanide for which adequate domestic capacity exists - This will help in enhancing domestic value addition.
| Existing Scenario | Outcome | Impact |
|---|---|---|
| Custom Duty "Methanol" 10% | Custom Duty "Methanol" 2.5% | Since it is mostly imported into India, provision will be broadly beneficial to many companies like Navin fluoro, Gujarat fluoro, Balaji Amines etc |
| Custom Duty "Acetic acid" 10% | Custom Duty "Acetic acid" 5% | Negative for Indian producers like GSFC, while positive for importers |
| Custom Duty "sodium cyanide" 7.5% | Custom Duty "sodium cyanide" 10% | Negative for Indian producers |
Our preferred stocks: Tata Power, Exide Industries, Amara Raja Batteries, Auto OEMS focused on EV like Tata Motors, Sona Comstar etc.
Sector Analysis - Banks & Financials
- Government has proposed to set up 75 Digital Banking Units (DBUs) in 75 districts of the country by Scheduled Commercial Banks so that benefits of digital banking reach every nook and corner of the country in a consumer-friendly manner.
- Introduction of Central Bank Digital Currency- proposed to issue digital rupee using blockchain technology in FY 2022-23.
- Digital Banking by Post Offices: 100% of post offices to come on the core banking system
Our preferred stocks: HDFC Bank, ICICI Bank, Bajaj Finance, Chola Investment.
Sector Analysis - Healthcare
- The National Digital Health Ecosystem will be rolled out. It will consist of digital registries of health providers and health facilities, unique health identity, consent framework, and universal access to health facilities.
- A "National Tele Mental Health Programme" will be launched which will include a network of 23 tele-mental health centers, with NIMHANS being the nodal center and International Institute of Information Technology-Bangalore providing technology support.
- Mission Shakti, Mission Vatsalya, Saksham Anganwadi and Poshan 2.0 were launched to provide integrated benefits to women and children.
- Two lakh Anganwadis to be upgraded to Saksham Anganwadis.
- Total allocation to the National Health Mission is increased from Rs. 34,947 crores in 2021-22 RE to 37,800 crores 2022-23 BE.
Sector Analysis - Education & Skill Development
- "One class, one TV channel" program of PM eVIDYA will be expanded from 12 to 200 channels.
- High-quality e-content in all spoken languages will be developed for delivery via internet, mobile phones, TV and radio.
- A Digital University will be established with world class quality universal education. The University will be on a networked hub-spoke model, with the hub building cutting edge ICT expertise. built
- Digital Ecosystem for Skilling and Livelihood (DESH-Stack e-portal) will be launched to promote online training. t will also provide API-based trusted skill credentials, payment and discovery layers to find relevant jobs and entrepreneurial opportunities.
- Startups will be promoted to facilitate Drone Shakti for Drone-As-A-Service
- In FY23 (2022-23 BE), the allocation to National Education Mission is Rs. 39,553 crores vs. Rs. 30,796 crores in 2021-22 RE.
Sector Analysis - MSMEs
- Udyam, e-Shram, NCS and ASEEM portals will be interlinked. Their scope will be widened. The platform will provide G2C, B2C, and B2B services.
- The ECLGS will be extended up to March 2023 and its guarantee cover will be expanded by Rs. 50,000 crores to total cover of Rs. 5 lakh crores, with the additional amount being earmarked exclusively for the hospitality and related enterprises.
- Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme will be revamped with required infusion of funds which will facilitate additional credit of Rs. 2 lakh crores.
- Raising and Accelerating MSME Performance (RAMP) programme with outlay of Rs. 6,000 crores over 5 years will be rolled out. This will help the MSME sector become more resilient, competitive and efficient.
- Certain Anti- dumping and CVD on stainless steel and coated steel flat products, bars of alloy steel and high-speed steel are being revoked.
Sector Analysis - Agriculture
- Government to promote funds for blended finance (government share limited to 20%) for sunrise opportunities such as climate action, agri-tech, etc.
- Fund to be facilitated through NABARD to finance startups for agriculture and rural enterprise, relevant for farm produce value chain. Startups will support FPOs and provide tech to farmers.
- Use of Kisan Drones to be promoted for crop assessment, digitization of land records, spraying of insecticides and nutrients.
- Procurement of wheat in Rabi season 2021-22 and the estimated procurement of paddy in Kharif season 2021-22 will give cover 1,208 lakh metric tones of wheat & paddy from 163 lakh farmers with Rs. 2.37 lakh crore will be the direct payment of MSP value to their accounts.
- Delivery of hi-tech services for farmers to be launched.
- MSP for farmers to be transferred directly into bank accounts.
- Chemical-free natural farming to be promoted in India.
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