#WINNERS
State-run banks
A plan to infuse capital worth Rs 700 billion ($10 billion) and provide a partial one-time guarantee on loan defaults on borrowings by shadow banks may help state-run banks. Strengthening the Reserve Bank of India’s regulatory hold on default-prone non-banking finance companies could help the beleaguered state-run banks.
Rural India
From increased spending on road construction to connect villages, to more rural homes built with power and fuel connections and support for small businesses producing cattle feed, the government’s continued push could benefit companies with exposure to rural India.
Aviation
The Finance Minister said the Centre will consider further opening up foreign direct investment in aviation. Apart from announcing another plan to sell state-owned Air India Ltd., the government also announced a plan enter aircraft financing and leasing.
Water
The plan to provide piped water across Indian households by 2024 and the focus on managing the nation’s resources by consolidating the country’s scattered water administration under the Water Power Ministry underlines the seriousness of India’s rising shortages.
Renters
Sitharaman’s promise of a model tenancy law for lessors will be a welcome move for millions across growing cities where 87.7 million citizens are expected to live by 2050.
Real estate & construction
The Finance Minister promised to build 19.5 million rural homes by 2022. That’s in addition to the continued focus on building roads under the national highways and rural roads programs.
#LOSERS
Defence
The Indian defense spending for financial year 2019-20 was pegged at Rs 3.05 trillion ($45 billion), with no change in the allocation made in February’s Interim Budget. Although this is higher than the revised estimates from the previous fiscal of 2.85 trillion rupees, it’s only going to keep pace with inflation and does not represent a real increase. The exemption in Customs Duty for imported military equipment was the only solace the Armed Forces received from Sitharaman, who was the Defense Minister in Modi’s first term.
High and middle-income earners
Wealthy and middle-class tax payers have a reason to groan. Finance Minister proposed to raise tax on income earners above Rs 20 million. The government has sought to discourage cash payments by levying 2% tax on withdrawal of over Rs 10 million in a year. In addition, tax payers will have to spend an extra Rs 2 on every liter of gasoline and diesel they buy. This will have a cascading effect on inflation as travel and food costs rise.
Jewellers, Gold importers
Jewelry stocks tanked as an increase in import tax boosted domestic prices to a record. That would make jewelry even costlier for buyers in the world’s second-biggest market ahead of the festival and wedding season starting from August.
Auto parts
India’s plans to shift its long-term focus on electric vehicles could hurt the growth of auto part makers. The government announced plans to make India a global manufacturing hub for electric vehicles and lowered GST on EVs to 5% from 12%, in addition to raising basic customs duty on auto parts.
Rivers & environment
The Finance Minister spoke about plans to use more of the country’s rivers to move goods within India. Supporters say it will unleash vibrancy in internal trade and complement the roll out of the goods and services tax that will create a single market. Critics say this plan will worsen environmental concerns, destroying vital ecosystems.
