Infra thrust: Capital-intensive sectors get boost in Union Budget 2021

Consumer demand likely to take a hit owing to reduction in overall public expenditure

The Budget, with its emphasis on capital expenditure and infrastructure projects, is a boost for capex-related companies but this has been tempered by a reduction in overall government expenditure in FY22.

The latter could dampen the pace of consumer demand in the next fiscal year and is negative for companies in the FMCG, consumer durables, and automotive sectors.

Gross Budgetary support for capital expenditure is up 26.2 per cent in the Budget estimates for FY22 compared to the revised estimates for FY21. The Budget has allocated Rs 5.54 trillion for capital expenditure in FY22 against the actual capex of Rs 4.39 trillion