Agriculture theme continues to lead agenda list in budget
The Union Budget 2020-2021 presented by Finance Minister, Nirmala Sitharaman, again emphasised on doubling the farmer income. The 16 action points are being drafted, which will work with the state government towards the action. The agricultural sector can be expected to work as per the theme of the government, with an aim to boost the sentiment and consumption.
The 16 action points were allotted Rs 2.83 lakh crore as well as Rs 1.23 lakh crore, which are proposed to be divided into two basic sectorial diversifications. The sector is divided into categories-such as irrigation and allied services, which is allotted Rs 2.83 lakh crore. The rural and Panchayati Raj is allotted Rs 1.23 lakh crore. The Finance Minister also threw light on higher agricultural credit. The target is to take total agriculture to Rs 15 lakh crore in FY21 from Rs 12 lakh crore in FY20.
The theme of agriculture in the Budget is as on expected lines. The pre-budget rally in the fertiliser sector has given 12 per cent rally since November 1, 2019 to January 31, 2020. These returns are against negative nine per cent returns for the span of last one year. Nagarjuna Fertilisers, Coromandel International, Fertilisers & Chemicals Travancore have given returns up to 55 per cent to 20 per cent during this time. The stocks to watch through can be Gujarat Narmada Valley Fertilisers & Chemicals and National Fertilisers which are yet to show any gains. These stocks, in comparison to other peers, have declined 12.6 per cent and 2.40 per cent during the last three months.
The higher budget allocation in the sector can also further directly boost industries such as rural banks, micro finance companies, Fast-Moving Consumer Goods (FMCG) and fertilisers etc.