Sensex slides 166 pts, FM keeps capex unchanged at Rs 11.11 lakh crore or 3.4% of GDP

The domestic equity barometers traded with minor cuts amid the ongoing Union Budget announcements by Finance Minister. The Nifty traded below the 24,500 level. FM Sitharaman kept Indias FY25 capex outlay unchanged at Rs 11.11 lakh crore - the same as was earmarked in February.

At 12:11 ST, the barometer index, the S&P BSE Sensex, was down 165.59 points or 0.21% to 80,336.49. The Nifty 50 index shed 35.45 points or 0.14% to 24,473.80.

In the broader market, the S&P BSE Mid-Cap index declined 0.21% and the S&P BSE Small-Cap index added 0.13%.

The market breadth was negative. On the BSE, 1,823 shares rose and 1,889 shares fell. A total of 141 shares were unchanged.

Union Budget 2024:

Finance Minister Nirmala Sitharaman presents the first Union Budget of the Modi 3.0 government during the Monsoon Session of Parliament. A key highlight is the provision of financial support for loans up to Rs 10 lakhs for higher education in domestic institutions. The Finance Minister also announces an incentivized scheme for job creation in the manufacturing sector, which will benefit 30 lakh youth and support employers and employees through EPFO contributions for the first four years of employment. The government will reimburse employers up to Rs 3,000 per month for two years for each additional employee, aiming to incentivize the additional employment of 50 lakh people.

Sitharaman states that the government will maintain strong fiscal support for infrastructure, with Rs 11.11 lakh crore allocated for capital expenditure, amounting to 3.4% of India's GDP. The government allocates Rs 1.52 lakh crore for agriculture and allied sectors. Sitharaman announces the release of 109 high-yielding and climate-resilient varieties of 32 field and horticulture crops for cultivation by farmers. There is a strong push towards natural farming for 1 crore farmers across the country, supported through certification and branding. Additionally, 10,000 need-based bio-input resource centres will be established to assist in the implementation of natural farming practices.

Under PM Awas Yojana, Urban 2.0, the housing needs of 1 crore urban poor and middle-class families will be addressed with an investment of Rs 10 lakh crore. The PM Surya Ghar Muft Bijli Yojana is launched to install rooftop solar panels for 1 crore households. Additionally, the government will set up an integrated technology system for the Insolvency and Bankruptcy Code (IBC) to improve outcomes, extend voluntary closure of LLPs, and expand C-PACE to LLPs. The IBC has dissolved more than 1,000 companies, resulting in a direct recovery of Rs 3.3 lakh crore.

Further, FM Sitharaman introduces three employment-linked incentive schemes as part of the Prime Minister's package, which will focus on recognizing first-time employees and providing support to both employees and employers. The Prime Minister's package also includes five schemes to facilitate employment, skilling, and opportunities for 4.1 crore youth over five years. For MSMEs in manufacturing, a new credit guarantee scheme will provide guarantees of up to Rs 100 crore for term loans to purchase machinery and equipment without collateral. Additionally, the government is committed to financing and completing the Pollavaram irrigation project in Andhra Pradesh, with extra allocations to support capital investment for economic growth

FM Sitharaman kept Indias FY25 capex outlay unchanged at Rs 11.11 lakh crore, same as it was earmarked in February. The government will end up spending 3.4% of the Budget on capex compared with 3.2% in the previous year.

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