Aditi Nayar
Chief Economist, ICRA

Economy

"As expected, the FY2023 fiscal deficit was maintained at 6.4% of GDP with an absolute overshoot being absorbed by the higher nominal GDP. The fiscal deficit and borrowing figure for FY2024 are slightly higher than our forecasts, given the welcome spike in capex. The efficacy of the substantially enhanced allocation for the 50-year interest free capex loan for the state governments will ultimately depend on the speed with which they utilise these funds."

Shamsher Dewan
Senior Vice President & Group Head - Corporate Ratings, ICRA

Auto

"Automotive sector gets a boost from Union Budget with a sharp 33% increase in capital investment outlay, focus on infrastructure projects, and relaxation in personal tax rates. Thrust on green energy continues with specific budgetary allocation for old vehicle scrappage, energy transition, and viability gap funding for battery storage solutions. Customs duty exemption on import of capital assets for manufacturing lithium-ion cells for batteries used in electric vehicles shall facilitate EV ecosystem development and aid faster penetration. An increase in the duty rates on compounded rubber is a challenge for tyre industry, which significantly depends on imported rubber."

Karthik Srinivasan
Senior Vice President & Group Head - Corporate Ratings, ICRA

Banking

"The Union Budget has been favourable for the banking sector with continued thrust on infrastructure development while adhering to the path of fiscal prudence. Apart from the push for affordable housing, continuation of the credit guarantee scheme for MSME lending and creation of a new entity under EXIM to aid refinancing of export financing are likely aid credit off-take. However, the hike in investment limits across select small saving instruments could increase competition on deposit mobilisations."

Karthik Srinivasan
Senior Vice President & Group Head - Corporate Ratings, ICRA

Insurance

"Unlike expectations, the Union Budget did not announce any recapitalization of the weak PSU general insurance companies. Further the improved attractiveness of the new tax regime coupled with the changes in taxation of life insurance policies can adversely impact the demand for tax-break induced investment products including insurance."

Sabyasachi Majumdar
Senior Vice President & Group Head - Corporate Ratings, ICRA

Telecom

"The Budget continues GoI's focus on increasing digitization across various sectors which bodes well for the telecom industry as it results in increased usage of telecom services. The proposal of setting up of labs for indigenous development of 5G based use cases to develop applications open up a range of opportunities and business models. The revised estimate of non-tax revenues from communication services for FY2023 stood at around Rs. 68,700 crore, higher than the budget estimate of Rs. 52,800 crore. The BE for FY2024 stands at Rs. 89,500 crore, which likely assumes another spectrum auction in the next fiscal."

Sabyasachi Majumdar
Senior Vice President & Group Head - Corporate Ratings, ICRA

Power & Green Energy

"The budget’s focus on green growth reinforces the commitment towards achieving energy transition in the long run. The announcement of a VGF scheme for battery energy storage projects and the intent to release framework for pumped hydro projects are key positives, given the importance of storage for RE sources, which are intermittent in nature. However the details are awaited, and timely implementation will remain crucial. The proposal for investment in transmission lines for large scale evacuation of green power from Ladakh is likely to support RE capacity addition and grid integration. Further, the increased budgetary allocation for distribution capex scheme is likely to enable state discoms to augment their infrastructure & thus reduce their operational inefficiencies."

Rajeshwar Burla
Vice President & Group Head - Corporate Ratings, ICRA

Infrastructure - Roads

"Gross budgetary support for the Ministry of Road Transport & Highways increased by 25% to Rs. 2.59 trillion in BEFY2024 from Rs. 2.06 trillion in REFY2023 to meet the completion targets for the Bharatmala and the NIP. In line with the last year budget announcement, the government continued with nil borrowing program for NHAI while increasing the allocation by 15% to support the higher NH execution target. As against Rs. 100 billion asset monetisation target in REFY2023, NHAI had already achieved its target for the year. With a steep target at Rs. 350 billion, the monetisation target appears ambitious despite strong appetite for operational road assets."

Rajeshwar Burla
Vice President & Group Head - Corporate Ratings, ICRA

Real Estate

"The Union Budget for FY2024 has underscored the government's focus on affordable housing segment through increased allocation to the flagship PMAY programme – higher by 3.2% and by 66% in FY2023-24 (BE) as compared to FY2022-23 (RE) and FY2022-23 (BE) respectively. This will aid in construction activity in affordable housing segment – rural and urban. Further, there will be minimal impact due to cap deductions from capital gains on investment in residential house under sections 54 and 54F to Rs. 10 crore as it limited to very high-ticket size transactions."

Sabyasachi Majumdar
Senior Vice President & Group Head - Corporate Ratings, ICRA

Fertilisers

"The budget continues its healthy focus on the farm sector, which is likely to benefit the fertilisers sector. The budget envisages launching of the PM PRANAM scheme to promote alternative fertilizers and balanced use of chemical fertilisers. The Government has budgeted Rs. 1.75 lakh crore towards fertiliser subsidy. This allocation is lower than ICRA’s estimates of around Rs. 2.0 lakh crore for FY2024 at current prices. ICRA however believes that there will be a calibrated subsidy allocation, depending on the evolving subsidy requirements during the year."

Shamsher Dewan
Senior Vice President & Group Head - Corporate Ratings, ICRA Limited

Hospitality

"Multiple proposals in the Union Budget are seen as structural positives for the Indian Hospitality sector. Tourism promotion, creation of new airports and focus on better regional access entailing improved connectivity, specifically tier-II/III towns, all augers well for hospitality demand. For foreign travellers, enhanced focus on tourist security and better availability of information aimed at providing tourist experience further facilitate better demand from overseas markets. This apart, other proposals towards ease of doing business, skill development initiatives and revamping credit guarantee for MSMEs also support the hospitality industry."