Tax cuts, higher MGNREGA would have made immediate positive impact on consumption

New Delhi, Feb 2 Measures to boost private consumption are limited in the Union Budget. Personal income tax related measures such as tax cuts, hike in standard deduction, and higher MGNREGA spending would have made an immediate positive impact on consumption, Morningstar Investment Adviser India said in a report.

The government continues to focus on boosting capex to support economic growth. This should also help to crowd-in private capex which is lagging.

Equity markets reacted positively to the budget as sectors such as capital goods, steel, cement and healthcare are expected to gain from the measures announced. Thrust on capital expenditure led by government, improving export attractiveness, low cost of credit, expectations of increased consumer spending, and housing market recovery with improving affordability levels are expected to support high corporate earnings growth

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