FMCG, consumer durables stocks are likely to gain today after FM Nirmala Sitharaman presents her second Budget speech.
Government is facing a significant fall in demand amid the ongoing slowdown in the economy.
FULL COVERAGE:Union Budget 2020
Measures such as widening of income tax slabs or lowering of income tax rates in Budget 2020 will leave more savings in the hands of taxpayers which will lead to a recovery in demand for goods and services in the economy.
In last year's Full Budget, no changes in the income tax slabs and rates were proposed. A rebate of Rs 12,500 was granted to all taxpayers with taxable income up to Rs 5 lakh.
This year, the panel on direct taxes code (DTC) has called for widening of income tax slabs. 10% tax slab should be extended to Rs 10 lakh, which will bring a significant relief to large chunk of taxpayers, the panel has said.
In order to kick start the economy, and to encourage investments, Sitharaman may raise income tax exemption limit for an individual income tax payee, which can boost consumption-based stocks. More money in the hands of the people will translate into higher demand for goods of these companies.
FMCG and consumer durables firms such as ITC, HUL, Nestle, Britannia, Emami, Dabur India, Marico, Colgate-Palmolive (India), P&G Hygiene & Health Care, Bajaj Electricals, Voltas, Symphony, Blue Star, IFB Industries and Whirpool will look for policies and schemes that can have positive impact on these sectoral indices.