Best Advisory Company:LIVE Union Budget 2017-18: Key takeaways from Finance Minister Arun Jaitley’s speech

LIVE Union Budget 2017-18: Key takeaways from Finance Minister Arun Jaitley’s speech

Finance Minister Arun Jaitley present, perhaps the most eagerly watched budget in recent past. Key takeaways on the implication from his budget speech

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Finance Minister Arun Jaitley present, perhaps the most eagerly watched budget in recent past. Here are the key takeaways on the implication from his budget speech: 

* Rising crude price, multiple interest rate hikes by the US Federal Reserves among the risks to the Indian economy 

* India still a bright spot in the global economic landscape. India expected to be among the fastest growing economies in 2017. 

* India has enough forex reserves to buy 12 months of imports 

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 * The effects of demonetisation is not expected to spill over next year. GDP growth though might be subdued in FY18 fiscal, growth can pick up in FY19 ahead of the next general election.

 * Focus will be on rural economy and poverty alleviation 

* Agriculture credit for 17-18 – Rs 10 lakh crore. Underserved areas will be focus. Expect the banking sector to be under pressure on account of increased outgo as this comes under priority sector

* Fasal Bima Yojana – coverage to be increased from 30% to 40% in tcurrent year and 50% next year. Outlay has been more than doubled. Expect increased agriculture activity which will be good for seeds, fertilisers and pesticides companies. 

* A dedicated micro-irrigation fund with an initial corpus of Rs 5,000 crore. A good move to increase farm productivity and reduced water dependency. Step in increase contribution of agro economy to the overall GDP.

* Modern law on contract farming will encourage corporate farming and bring in retailers and agri companies in the field

* To bring 1 crore households out of poverty by attempting to increase livelihood. Good for consumer companies.

* MNERGA outlay – 100 lakh ponds as against 5 lakh have been dug up. This is expected to remain at 5 lakh in the current year. MNERGA fund increased Rs 48,000 crore from Rs 38,500 crore (spent Rs 47,000 crore). Rural focus continues.

* Positive for housing sector – Government has increased rural houses target to 1 crore and increased outlay to Rs 15,000 crore to Rs 23,000 crore

* Rural expenditure has shot up by 24 percent from Rs 1,87,223 crore – consumer and consumable companies should be happy with the increased allocation

* Current account deficit declined to 0.3 percent of GDP – it has more to do with slowing imports and slowing domestic economy. Not something to be happy about. Rising crude oil prices can distort this figure going forward

* Focus of government continues to be on skill training which should help overall employment and employability of youths. Positive for the overall economy.

* Affordable housing will be given infrastructure status. Big positive for developers, banks and housing finance companies

* Infrastructure status to housing finance companies would help reduce interest rates. This coupled with interest subvention scheme can go a long way in pushing low cost housing demand

* Amendment of drugs and cosmetic rules for use of generic drugs. Medical devices will also be included under price control. Will impact pharma companies as prices of drugs goes down.

* Senior citizen Aadhar based health card will be introduced. Though good for the elderly, it may not be taken well by pharma companies as geriatrics account for a significant portion of these companies sales.

* Railway outlay at Rs 1.31 lakh crore of which only Rs 55,000 crore will be from the Budget. Not too good for the railways as they were facing issues raising funds. However, merging the rail budget with the Union Budget can give it some leeway, especially the savings on the special dividend paid to the government.

* 25 stations to be redeveloped. Good for developers and infrastructure companies, though the size is too small in the overall scheme of things

* Railway will introduce end-to-end solutions for some commodities. This can bring back traffic to railway but impact heavy commercial vehicles. LCVs will benefit as they will be involved in the last mile connectivity

* Road sector – allocation increased from Rs 64000 crore to Rs 57676 crore. Good for the road sector as the surface transport ministy intends to speed up implementation from 30 km/day to 40 km/day.

* Higher outlay for transport sector at Rs 24,1387 crore. Will benefit the overall sector which has a bigger multiplier effect

* 20 GW of solar capacity to be installed. This will slowdown thermal power plant installations which have anyway taken a beating. However, the issue of base load purchases has not been addressed

* Infrastructure outlay at Rs 3.96 lakh crore – positive for the sector. Implementation is key as projects are held up. No announcements of easing hurdles and getting some of the stalled projects moving 
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