Budget 2024: Agri stocks in focus and expectations for the rural sector

The NDA government is likely to focus on rural infrastructure and agriculture sector in its Union Budget tomorrow after the BJP failed to reach the majority mark in the recently concluded Lok Sabha elections, said analysts and brokerages. Here’s a look at what they expect from FM Nirmala Sitharaman’s seventh Budget speech.

Brokerage Anand Rathi expects increased budget allocation for agri /rural infrastructure, and for Kissan Samman Nidhi. It also sees higher credit flows to the agriculture sector. “While a large part of agri/rural policies (MSP, legislative reforms) are outside the Budget, we expect significant measures in rural infra, MGNREGA and welfare schemes.”

"While we do not expect the coming Budget to be populist, we expect agriculture and the rural economy to receive significant attention. In view of the withdrawal of the three farm laws by the previous parliament, the direction of agricultural reforms is once again uncertain. We expect the coming budget to provide a road-map for this including agricultural marketing, infrastructure creation, technology for greater productivity and stability, remunerative farm product pricing, affordable agricultural input costs and rural job creation. We expect a meaningful increase in allocation for agricultural and rural development, including rural infrastructure, direct-benefit transfers, rural housing, financial inclusion and MGNREGA. Providing facilities now available in urban areas to rural areas, and improving rural employment opportunities, income and consumption in rural areas are expected to be the prime focus of Budget," said Anand Rathi.

Brokerage JM Financial expects the government to announce a Production Linked Incentive (PLI) scheme for the Crop Protection sector. Shares of Sumitomo Chemical, Dhanuka Agritech, Insecticides India and PI Industries will be in focus post such an announcement.

Brokerage Nuvama expects a rural boost in the Full Budget.

The agriculture sector expects the government to set aside Rs 2 lakh crore for the agriculture ministry to help it expand the government's flagship schemes on income support and crop insurance for farmers, Nuvama said.

The government is likely to allocate more funds to rural schemes to boost consumption, benefiting companies such as Hindustan Unilever, TVS Motor, and Hero MotoCorp, according to a report by Citi cited by Reuters.