Generally speaking, the government’s divestiture plans have been aggressive and have fallen short of its goals for five years running. The performance of the divestiture during the previous several years has been affected by price problems, labor union and other interest group lawsuits, delays in demergering non-core assets, and fluctuations in the financial markets. Based on the assumption that the government retains authority over the company’s governance and sells off any excess shares, we project a possible divestiture of almost Rs 11.5 trillion at the present market value. The federal government’s budgetary situation is still strong thanks to the RBI’s big dividend, which may lessen the need to press for divestments.
Stock Broking Entities: Diversification
is Key for Sustainable Profitability
Amidst Regulatory Uncertainty
PV Sales Volumes Likely to Grow at
a Moderate 3%-5% in FY25
Tariff Hikes to Increase ARPU by 15%, Expand
PBILDT by 20-22%
NOTE FROM
SACHIN GUPTA
Chief Rating Officer & Executive Director
Upcoming Budget – Staying the course or being populist
Over the past ten years, the NDA government’s policy has mostly concentrated on the following: capital and infrastructure investments spending, creating several initiatives like Pradhan Mantri Gram Aavas Yojana which benefit the bottom of the pyramid, focusing on the ‘ease of doing business’, strengthening focus on manufacturing through PLI, and giving food grain support to the poor. With the exception of the latter, which is “food grain support to the poor,” the government has mostly concentrated on constructing “real” infrastructure, such as manufacturing facilities, roads, homes, restrooms, and renewable energy sources. This has mostly been accomplished on a commercial basis and with very little ongoing subsidies. Furthermore, the administration refrained from implementing tax cuts as a means of putting “more money in the pocket of the consumers.” The anticipation was
With this strategy, the government was able to bear the majority of the capital burden while still maintaining acceptable levels of fiscal deficit. expenditure and investments, with a significant decline in capital expenditures from the private sector throughout the specified time frame. Furthermore, throughout the roughly two years of COVID-19’s influence, welfare spending increased significantly while receipts were subdued.
With the recent general elections yielding a “not so great” mandate, the issue now is: would the administration reverse course and embrace more favorable regulations? Individual tax breaks and policies that encourage consumption are in high demand.
But we think it’s improbable that the administration would abruptly turn left and adopt a more populist stance. We anticipate the The government should keep concentrating on developing more “real” assets, such as industry and infrastructure. We point up three reasons that this is probably the case.
