The upcoming 2024 Interim Union Budget in India is anticipated to impact various sectors, particularly drawing attention to companies involved in infrastructure development such as roads, ports, and airports. With Prime Minister Narendra Modi’s government gearing up to present its final budget before the upcoming national elections, traders are closely monitoring stocks associated with infrastructure projects. This focus aligns with Modi’s emphasis on robust infrastructure development, a key element of his economic strategy that has contributed to India’s impressive economic growth compared to other major economies.
In Finance Minister Nirmala Sitharaman’s budget speech on Thursday, special attention is expected to be given to shares related to rural spending and state-owned enterprises. Policymakers aim to devise strategies to stimulate demand in the extensive rural areas of the country. Rural development has been a priority for the Modi administration, and measures to enhance rural spending could play a crucial role in the budget proposals.
While Modi’s focus on infrastructure has generally propelled India’s stock markets, recent trends show a slight decline in enthusiasm, particularly marked by foreign investors withdrawing over $2.6 billion from local equities this month. The Feb. 1 budget, though interim, holds significance as it provides insights into the government’s economic assessment. The anticipation is heightened by expectations of Modi securing a third term in the upcoming elections scheduled for April-May. The budget proposals will serve as a key indicator of the economic direction that the government envisions during this transitional period.