Other key measures and figures announced in Budget:(a) Divestm | Start Learning

Other key measures and figures announced in Budget:(a) Divestment target kept at Rs 65,000 crore for FY23 versus Rs 1.75 lakh crore for FY22 (BE) and Rs 78,000 crore for FY22 (RE). The divestment targets now appear realistic given the privatization pipeline.(b) Emergency Credit Line Guarantee Scheme (ECLGS) has been extended to March 2023 to provide much-needed additional credit to more than 130 lakh MSMEs. There has been additional amount of Rs. 50,000 Cr. earmarked exclusively for the hospitality and related enterprises which are severely hit due to the lockdowns.

This will help the flow of credit to MSME sector and also banking sector in healthy assets loan growth.

(c) PLI:- Production linked incentive scheme, which has been a good success in boosting manufacturing gets further impetus through additional allocation of Rs19,500cr specifically targeted for solar modules manufacturing.


Source: Budget Documents. A= Actual, BE=Budgeted Estimate, RE = Revised Estimate

Outlook
The equity markets have cheered the budget with it being growth-oriented, however, the bond markets have seen some hardening in yields due to the higher-than-expected fiscal deficit and government borrowing.

The market will soon digest the budget and move on to fundamental factors and global cues. Corporate earnings in Q3FY22 have been in line with the expectations and is expected to see moderate growth in FY22.

Even though market valuations are elevated, the recovery in corporate earnings and the easy liquidity scenario globally may help to support valuations for some time.

Overall, FY23 will be the year of normalisation (from the COVID-19 pandemic) and will set the stage for acceleration in future growth.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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