Share Market Budget 2024 Live Updates: As Nirmala Sitharaman prepares to present Budget, what’s in store for stock markets?

What has the Economic Survey said about the Budget? The Economic Survey has cautioned against the possibility of overconfidence leading to speculation and the expectation of even greater returns in the stock market. The Indian stock market was among the best-performing markets, with India’s Nifty 50 index ascending by 26.8 per cent during FY24. The Sensex has already crossed the 80,000 level.

‘Retail investors flock to market, hold Rs 36 lakh crore worth stocks’

The number of retail investors in the domestic stock market has surged to over 9.5 crore at present and they directly own close to 10 per cent in the market through investments in 2,500 listed companies, the Economic Survey 2023-24 said.

This unprecedented surge in retail investor participation and activity has been fueled by the technological advancement such as India Stack and regulatory measures.

“Individual investors today are over 9.5 crore and have nearly 10 per cent direct ownership of the market through its almost 2,500 listed companies. This translates to around Rs 36 lakh crore of wealth as of March 2024, apart from indirect ownership in equity mutual funds that have Rs 28 lakh crore in assets under management (AUM),” the survey said. Read More

How does a Union Budget influence the economy?

Apart from not overburdening people with increasing levels of borrowings and debt, a government can use the budget to influence the behaviour of Indian citizens and businesses in two broad ways.

One is by tweaking who it taxes and how much. For instance, if a government wants to incentivise businesses in one segment of the economy — presumably because it believes such a move will leverage India’s demographic profile, create jobs and bring prosperity — it can lower the tax rate. To be sure, lowering the tax rate may not necessarily lead to lower revenues; it is quite possible that the increased economic activity (thanks to the lower tax rate) leads to higher overall revenues despite a lower tax rate.

Second is by tweaking where a government spends and how much. While the budget is only for a year, budgets at the start of a new government’s term (as is the case this time) can often signal a broader shift in how the government wants to spend its money.