Budget 2024 Market Impact: Stock Market, FMCG, Mobile Phone & Real Estate

This year the Union Budget was presented in the month of July due to the Lok Sabha Elections. However, an interim budget was presented back in the month of February.

The Union Budget 2024 was primarily themed on employment, skilling, MSMEs and the middle-class population of India.

There are several sectors which are most likely to be impacted by this Union Budget, let us explore Budget 2024 market impact in detail. Read along to get further insights about the same.

Major Market Impacts of Budget 2024

Here are some of the sectors which will be impacted by the Union Budget 2024:

• Stock Market

This year’s Budget 2024 impact on the stock market is significant. The government has increased the Short Term Capital Gains (STCG) tax rate from 15% to 20%, and the Long Term Capital Gains (LTCG) rate has been raised from 10% to 12.5%. 

Moreover, the Securities Transaction Tax (STT) is also raised from 0.01% to 0.02%. These steps from the Central Government will discourage investments and savings in the market.

• FMCG

The FMCG sector may witness a major boom in the near future as the Central Government has allocated a capital expenditure of ₹11.11 lakh crore.

There are multiple reforms which have been announced to make the country self-sufficient, focusing on the production of pulses and oil seeds such as soybean, mustard, sunflower and sesame.

Additionally, the budget's focus on the agricultural sector, including natural farming, is expected to positively influence the FMCG sector indirectly.

• Real Estate

In Union Budget 2024, the honourable Finance Minister has announced the government's commitment towards building an additional 3 crore homes under the Pradhan Mantri Awas Yojana (PMAY) for urban areas.

This initiative from the government will encourage the affordable housing segment of the real estate sector, driving demand for construction materials and labour. 

Moreover, the development of vegetable supply chains, infrastructure and industrial parks near these projects will create substantial opportunities for real estate stakeholders in the area.

• Mobile Phones

The 2024 Union Budget also had a major impact on the smartphone industry, as the government has reduced the customs duty on mobile phones to 15% which was 20% earlier. It is applicable not only for smartphones but also for various smartphone accessories such as printed circuit board assemblies, adapters and chargers.

Moreover, the current customs duty on imported smartphones is 22%, which will be 16.5% after this cut. This will enable customers to enjoy smartphones at a cheaper rate, which will increase the overall sales of smartphones.

• Gold

The gold and precious metal industry is likely to witness a boost as the government has announced a reduction in customs duties on gold and other precious gems/metals.

The customs duty on gold and silver was reduced from 15% to 6%, while the customs duty for gold and silver dore was reduced from 14.35% to 5.35%. 

However, this decision may negatively affect returns on gold bonds. The prices of sovereign gold bonds, which are linked with the prevailing gold prices, have been impacted by the duty cut.

• Automobile

The honourable Finance Minister did not announce direct measures, impacting the automobile sector. However, there were several indirect developments that could influence it.

The government has reduced customs duties on a total of 25 minerals which include lithium which is used to manufacture EV batteries. Therefore the cost of manufacturing EVs will decrease making it more affordable for the customers.