Budget 2024: What does the Indian stock market expect from the coalition government Budget? Here’s what experts say

Budget 2024: The Indian stock market is at record highs, foraying into unchartered territory, underpinned by solid economic growth, easing inflation, and expectations of a well-balanced Union Budget aimed at fiscal consolidation while boosting manufacturing, infrastructure, and rural sectors.

The stock market has discounted most triggers, and the upcoming Union Budget is expected to offer fresh fuel to go higher. The government is unlikely to lose its grip on fiscal prudence, which is a positive factor for the market. Besides, markets will look for measures to boost consumption, support the rural sector and some relief on personal taxation.

Also Read: Long Term Capital Gains Tax: As Budget 2024 draws nearer, a look at LTCG tax and how it applies on different assets

Mint spoke to several experts to gather their expectations for the upcoming Union Budget 2024. Here are their insights:

Mahendra Kumar Jajoo, CIO – Fixed Income, Mirae Asset Investment Managers (India)

The Federal Budget for FY25 is expected to be announced towards the end of July.

The continuation of the same government is a reasonable sign that the broad direction of the policy framework will also continue, such as the path towards fiscal consolidation, infrastructure push, social upliftment, etc.

There are expectations of some reduction in market borrowings following a bumper dividend pay-out by RBI.

There is also some buzz around special status/assistance that may be given to states like Bihar and Andhra.

Also Read: Income Tax Budget 2024 expectations: Will FM Nirmala Sitharaman offer new tax breaks or tighten existing ones?

Further, some hopes for reduced tax benefits to the mid-range earning bracket.

Markets also hope that the capital gain tax benefit available on equities is not curtailed.

On the growth front, apart from capital expenditure (capex), there is the possibility of pushing agriculture and manufacturing further to cater to the last mile.

Overall, the Budget should be well-balanced. While the existing agendas may not be tweaked, markets will look at how consumption will get a boost, what will be done to support agriculture, and if there are any tweaks on personal taxation.

Also Read: Centre may tweak criteria for middle-income groups for urban housing scheme

Aamar Deo Singh, Senior Vice President, Research, Angel One

Markets are positive about Budget expectations. This will be the first budget led by a coalition government post-2014, so it will be interesting to watch how the government balances growth and the challenges faced by inflationary trends and job creation.

Overall, the market expects the reforms to gain pace, but populist means cannot be ruled out. Given the rising price rise, some relief for taxpayers is expected.

Kunal Shah, Senior Research Analyst, Carnelian Asset Management & Advisors

We have always maintained that risks often come from “unexpected sources.”

The last few days have given us a slight glimpse of the same, with the market reacting to extremes on both sides.

From the BJP-led government to the NDA-led government, we have already seen a roller coaster movement, and people with a view on either side turned out to be right.

Continuity in government spending and investments will be the most looked-after number in the Budget.

With fiscal under control and a big amount coming in from RBI, we can surely see some extra rural-led spending, which will be good for the rural segment of the country.

These two would be major things to watch out for in the coming Budget.

Prashanth Tapse, Senior VP and a research analyst at Mehta Equities

Looking at strong economic growth and the speed of GDP, I wish the new government led by Prime Minister Narendra Modi would focus on enhancing consumer spending by allowing more cash in the hands of the common man, who would eventually spend or invest for economic growth, and focus on higher capex towards infrastructure development.

I also expect the government to focus on rationalising taxes for the common man and working towards a $5 trillion economy.

From a stock market perspective, there should be no change in long-term and short-term capital gain taxes, and the reforming action should continue in continuation of last year's budget with no change and no reduction in sector-wise capex.

Dikshit Mittal, Fund Manager & Senior Equity Research Analyst, LIC Mutual Fund Asset Management Ltd

We expect the Union Budget 2024 to ensure policy continuity.

The Budget may focus on infrastructure spending, job creation, sustaining capital expenditure momentum, and pushing for revenue growth.

At the same time, the Budget is expected to continue with the process of fiscal consolidation.

Some measures to boost consumer purchasing power cannot be ruled out.

Markets are generally driven by earning outlook and cost of capital, and if no major negative surprise comes on the taxation front, markets are likely to take the budget positively.

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Disclaimer: The views and recommendations above are those of individual analysts, experts, and brokerage firms, not Mint. We advise investors to consult certified experts before making any investment decisions.