Consumption theme could underperform as Budget 2022 goes big on infra

Higher inflation and cost of capital remain key worries amid expansion

The lack of negative surprises, the ongoing focus on spending-led growth and modest fiscal consolidation in the Union Budget was welcomed by the markets. Benchmark indices were up about 1.5 per cent in trade as the Finance Minister stuck to the capex led-growth script while giving populist sops the wide berth. While some sections of the market were also expecting measures to boost demand via the consumption route, the FM refrained from tinkering with the individual tax rates or the housing-related sops.  

Like last year, the Budget’s core focus was infrastructure with capex investments up 35.4 per cent y-o-y to