Who won and who lost

The government has increased spending in the agricultural sector, which accounts for about 19% of the economy.

Prime Minister Narendra Modi’s government presented the budget on Wednesday which sets out a series of measures to boost infrastructure to create more jobs and attract investment ahead of crucial national elections next year.

With a year to go until national elections, it is crucial that Prime Minister Modi tackles the problems of high unemployment and inflation as he seeks to win a third consecutive term. Finance Minister Nirmala Sitharaman has focused on farmers, backward castes and women to address inequalities exacerbated by the pandemic.

The government has increased capital expenditure by 33% to 10 trillion rupees ($122 billion), which will enable the country to expand its network of roads, ports and airports and make it an attractive destination for investors.



The government has increased spending in the agricultural sector, which accounts for about 19% of the economy. The budget proposes to spend 22 billion rupees ($269 million) on high-value horticulture and establish an agricultural accelerator fund to fund agricultural startups. This will benefit companies such as Kaveri Seed Co., Dhanuka Agritech Ltd., Bombay Super Hybrid Seeds, Rashtriya Chemicals & Fertilizers Ltd.


To capture the increase in travel demand, India will select 50 destinations to promote domestic tourism. It will also develop an app to guide tourists through food streets, security, physical and virtual connectivity to enhance their experience. Ticketing companies and hotels such as Indian Railway Catering and Tourism Corp., Thomas Cook India Ltd., Indian Hotels and EIH Ltd. will be the beneficiaries.


Key to boosting last mile connectivity, India has decided to build 50 additional airports, heliports and airfields and identified 100 new projects. The railways will benefit from a record outlay of 2.4 trillion rupees. This is a victory for airport operators such as Adani Airport Holdings Ltd., GMR Airports Infrastructure Ltd., GVK Airport Developers Ltd. and construction companies like Larsen & Toubro Ltd. and Bharat Heavy Electricals Ltd.


As expected, the Modi administration gave relief to taxpayers. People with incomes up to Rs 700,000 will not have to pay tax under the new income tax scheme. The number of tax brackets has been reduced, while the top tax rate has been reduced to 39%. This will leave more money for the middle class, which may also stimulate consumer demand.


The increase in capital expenditure and investment in housing, infrastructure and railways announced in the budget is positive for steel mills and cement manufacturers. The main winners are Tata Steel Ltd., JSW Steel Ltd., Jindal Steel & Power Ltd.

Electric vehicles

India plans to boost green mobility by waiving import duties on capital goods needed to manufacture lithium-ion cells used in electric vehicle batteries. This will be a boost for battery manufacturers such as Exide Industries Ltd. and Amara Raja Batteries Ltd. and automakers like Tata Motors Ltd., Mahindra & Mahindra Ltd.

Green energy

The budget provided for an investment of 350 billion rupees in energy transition and carbon neutrality initiatives. The government will provide financial support for battery energy storage systems with a capacity of 4,000 megawatt hours.


cigarette manufacturers

The shares of ITC Ltd. and Godfrey Phillips India plunged early in Mumbai trading after India raised a tax by about 16%, effective Feb. 2, on certain cigarettes.


Jewelery stocks fell after the government left import taxes on gold unchanged despite demands from the bullion industry to reverse the hike announced in July. The government has also increased the import tax on silver. A higher tax increases the cost to consumers because the country imports almost all of the bullion it consumes. Benchmark gold futures in Mumbai rose 1.3% to a record high of 57,950 rupees per 10 grams. The main losers would be Kalyan Jewelers India Ltd., Titan Co. and PC Jeweler Ltd.

Oil Refiners

Indian state refiners Indian Oil Corp., Bharat Petroleum Corp., Hindustan Petroleum Corp. are likely the losers as the government has not announced any compensation for losses related to diesel and petrol price controls. The companies and the oil ministry have asked to partially cover the losses through budgetary support.

Foreign builders

Imported automobiles, including electric vehicles, will be subject to higher levies. Tariffs on cars and electric vehicles priced over $40,000 imported as fully built units have been increased from 60% to 70%. Foreign automakers like BYD Co. and Mercedes Benz that depend on imported cars to serve the Indian market will face challenges.

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