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Winners of Budget 2023-24

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Who wins from Budget 2023-24?

The Union Budget 2023-24 presented last Wednesday is a perfect balancing act. Despite putting the nation’s finances on a fiscal consolidation path, the Budget also allocates appropriate capital expenditure to stimulate the economy. There are a lot of sectors that are winners. A few are losers.

Banks and financial services

The Budget announcement did not trigger any reaction in the bond market. Bond yields barely moved to indicate a positive response to the credibility of the budget numbers. The government borrowing is below market expectation, and the government has presented a plan for 2023-24 based on relatively conservative tax revenue expectations, according to most analysts. That is good news for the banking and financial services segment as it shows limited upside to their cost of funds. Most analysts expect bank profit margins to improve in the year ahead.


The government allocated Rs 12.5 lakh crore towards the infrastructure sector for 2023-24. That is a 17% jump over the year-ago period. That kind of expenditure triggers economic activity in roads, railways, highways, housing, and airports, among other areas. That is good news for businesses riding on the back of the increased government spending. Heavy engineering and construction companies, those making railway stock and related equipment, real estate and development are all set to see another year of exciting government contracts. 


The Budget has given a boost to the middle class and the salaried by way of tax cuts. The Budget encourages the salaried to move from the old tax regime to the new one. It leaves more money in the hands of the households. There is also a rationalisation of taxation for the super-rich with an effective reduction in the peak income tax rate. The finance minister announced a cut in the surcharge. The consumption demand could go up as a result. That is good news for all retail, travel and tourism companies and high-end luxury segments.

Energy and renewables

The government’s focus on ramping up non-conventional energy production is good news for businesses in the solar, wind or hydro-power segments. Large conglomerates like Reliance Industries, the Tata Group and others have already announced plans to ramp up generation. The allocation to the Ministry of Power is up by more than 20% over the last year. That means state-owned power producers and transmission companies could benefit too. 


The most visible reaction to the Budget 2023-24 was in listed life insurance companies. Share prices of major insurance companies tumbled as the finance minister made high-value insurance policies taxable. The rich were paying no tax for a guaranteed return scheme that offered an interest rate of 6.8% to 7%. It was a loophole that the government plugged in. While they did that, it was bad news for private sector insurers. The sharp market reaction shows how critical these high-premium insurance policies were for these companies. You must dive deeper into every sector to understand the impact and pick appropriate sectors. The other option is to use Alphaniti.

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