India’s federal budget 2023: Deep dive into who gained and lost

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Prime Minister Narendra Modi’s government delivered India’s annual budget on Wednesday that laid out a slew of measures to bolster infrastructure for creating more jobs and attract investment ahead of next year’s national election.

With a year to go for national polls, it’s crucial for Modi to tackle the issues of high unemployment and inflation as he seeks to win a third consecutive term. Finance minister Nirmala Sitharaman focused on farmers, so-called backward castes and women to deal with the inequities exacerbated by the pandemic.

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The government increased capital spending 33 percent to 10 trillion rupees ($122 billion) that will enable the country to expand its network of roads, ports and airports, and make it an attractive investment destination.



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


To capture the surge in travel demand, India will select 50 destinations to promote domestic tourism. It will also develop an app to guide tourists on food streets, security, physical and virtual connectivity to lift 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.


Crucial to boosting last-mile connectivity, India has decided to build 50 additional airports, heliports and aerodromes, and identified 100 fresh projects. Railways will benefit from a record capital outlay of 2.4 trillion rupees. This is a win 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, Modi’s administration gave some relief to taxpayers. Individuals with income up to 700,000 rupees won’t have to pay tax under the new income tax regime. The number of tax slabs were reduced, while the maximum tax rate was cut to 39 percent. This will leave more money with the middle class and boost consumption demand.


Higher capital expenditure and investments for housing, infrastructure, railways announced in the budget are positive for steel mills and cement makers. Key gainers include Tata Steel Ltd., JSW Steel Ltd., Jindal Steel & Power Ltd.

Electric Vehicles

India plans to provide impetus to green mobility by exempting import of capital goods required to manufacture lithium-ion cells used in electric vehicle batteries from customs duty. This will be a boost for battery makers such as Exide Industries Ltd. and Amara Raja Batteries Ltd. and automakers like Tata Motors Ltd. and Mahindra & Mahindra Ltd.

Green Energy

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



The budget lacked impetus for defense manufacturing, said Gaurav Mehndiratta, partner and head of aerospace and defense at KPMG. Military budget got a paltry increase of 7 percent, compared with a 33 percent increase in the nation’s overall capital expenditure, he said. That’s a surprise given the rising tensions between India and China. State-run firms Hindustan Aeronautics Ltd. and Mazagon Dock Shipbuilders Ltd., which have benefited from India’s local manufacturing push, were key decliners, falling more than 6 percent each.

Cigarette Makers

Shares of Godfrey Phillips India plunged in Mumbai after India increased a tax, effective February 2, on specified cigarettes by about 16 percent.


Jewelry stocks dropped after the government left import taxes on gold unchanged despite demand from the bullion industry to reverse the hike announced in July. The government also increased the import tax on silver. A higher tax increases the cost for consumers as the country imports almost all the bullion it consumes. Benchmark gold futures in Mumbai rose as much as 1.3 percent to an all-time high of 57,950 rupees per 10 grams. Key losers would be Kalyan Jewelers India Ltd., Titan Co. and PC Jeweler Ltd.

Oil Refiners

Indian state-run refiners Indian Oil Corp., Bharat Petroleum Corp. and Hindustan Petroleum Corp. are likely losers as the government didn’t announce any compensation toward losses on keeping a check on diesel and gasoline prices. There have been demands from the companies and the oil ministry to partly cover the losses via budgetary support.

Foreign Carmakers

Imported automobiles, including electric vehicles, will attract higher levies. The customs duty on cars and EVs priced above $40,000 and imported as completely-built units was increased to 70 percent from 60 percent. Foreign carmakers like BYD Co. and Mercedes Benz that rely on imported cars to serve Indian market will face challenges.

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