Union Budget 2024 expected to boost Indian stock market growth; Key points
In December 2023, the Indian stock market showed a remarkable recovery and expansion, surpassing many of its international rivals. Elements leading to this revival include the ruling party’s recent massive election victory, their commitment to improving infrastructure and the upcoming announcement of the Union Budget for the 2024-2025 financial year, which created a wave of optimism among investors.
New Delhi: The Indian stock market remained at a high in December 2023, continuing the positive wave of the previous month. Even amid local and global challenges, the market has become resilient and robust, outperforming many of its global contemporaries. This piece discusses what has fueled this success and how the upcoming Union Budget for the financial year 2024-2025 could further boost this growth.
Factors behind the rise of the Indian stock market
A major factor shaping the Indian stock market is the recent election wave of the ruling party, the BJP, in Rajasthan, Madhya Pradesh and Chhattisgarh. This political triumph has boosted investor confidence and promised a positive impact on the market. The government’s commitment to improving infrastructure, energy and urban development also contributes to the market growth forecasts.
Moreover, the Center is likely to reduce petrol and diesel prices ahead of the Lok Sabha polls due next year. Crude oil prices have fallen in the international market and this is expected to reduce the prices of petrol and diesel in the country’s domestic market.
Union Budget 24–25 and Stock Market Growth
The interim budget for the financial year 2024-2025 is a much-awaited event for the Indian stock market. This is predicted to reveal growth drivers, but it could push the market’s positive performance even further. Deloitte India speculates that the Budget could channel money into improving the port and shipping sectors, green energy and urban infrastructure. These investments are likely to lead to higher capital expenditure and could restore the vitality of the market.
Moreover, the government’s strategy to shift savings from subsidies to spending aimed at sustainable income growth among rural households can revive the disposable income of the rural economy. This, in turn, could have a positive impact on various stock market sectors.
Taking into account the economic expansion, India has already registered a growth of 7.8 percent in the first quarter. Deloitte India has revised its growth forecast and forecast a range of 6.5 to 6.8 percent for FY24, further strengthening the stock market’s potential.
Union Budget for FY 2024-2025: Expectations
The Union Budget for the financial year 2024-2025 is likely to play a crucial role in sustaining and boosting market growth in the coming financial year. Investors and market players are eagerly awaiting the unveiling of the budget to understand the government’s future plans and policies. By focusing on sectors such as infrastructure, energy and rural development, the budget could encourage investment and pave the way for growth opportunities.
In short, the Indian stock market has shown remarkable resilience and growth in December 2023. The political victories, along with expected measures in the Union Budget, have set the market up for even greater success in the 2024-2025 financial year. Investors and stakeholders are eagerly awaiting the budget announcement in anticipation of capitalizing on the potential opportunities on offer.