Best 5 Stocks To Buy Now After Budget 2020-21

Union Budget 2020-21: Lacks steroids – intents in place!

Union Budget 2020-21 lacked the much needed steroid to boost the slumping economic growth immediately, however, several measures were announced in bits and parts that may fire power the economy in the long run and broaden the economic growth. Fiscal deficit target for FY20 was raised to 3.80% against 3.3% pegged earlier and for FY21 it was raised at 3.5%.

Although this was largely expected, it gives Global rating Agencies reason to be concerned. LTCG on Equities was left unchanged and this puts to rest expectation or proposals to tweak the same in future. Dividend Distribution Tax was removed from the company and now it will be taxable in the hands of the recipient. Listing of Life Insurance Corporation of India on the stock exchanges was on expected lines as the same was being recommended for long.

Measures have been taken to boost income and purchasing power of individuals through rationalizing the direct tax rates. However, the complex structure may take time to decipher the exact savings from an individual point of view.

Though the measure will boost consumption, it may bring down savings to that extend and in India consumption and savings is equally important. Though budget speech highlights increase in insurance penetration, no such measure has been announced to increase the same.

Agriculture, Irrigation, Rural Development and Growth remains a priority of the Budget. This will keep consumption sectors in India strong and help broad base economic growth in the country.

Reiterating Infrastructure development thrust, National Logistics Policy to be launched and accelerated development of Highways and Railways along with 150 passenger trains through PPP mode and more Tejas type trains for tourist destinations will be undertaken. 100 more airports to be developed under UDAAN.

Efforts to replace conventional energy meters by prepaid smart meters and expand National Gas Grid to 27,000 km has been announced. The government’s plan to encourage the manufacture of mobile phones, electronic equipment, and semiconductor manufacturing and medical devices will boost domestic manufacturing.

From the stock market point of view, the Union Budget 2020-21 makes it even more prudent to follow a bottoms up approach to investing as the opportunity lies in certain pockets and only efficient and compliant companies would benefit from the current policies, budgetary allocations, announcements. Details of Budget Table, Sectoral Impact and Top Picks follows in the ensuing pages.