The Union Budget 2021 Highlights!!

The Union Budget 2021 Highlights

The Finance Minister Nirmala Sitharaman announced the Union budget for 2021-2022 . This budget is of great significance as it comes amid an economic recession caused by the coronavirus pandemic. All eyes were on the budget with hopes that it would provide relief and help in lifting the economy. The budget received a positive response from the markets and many experts have termed it to be pragmatic, given the underlying circumstances. Given below are some of the key highlights from this budget.

The Union Budget 2021 Highlights – Healthcare

Against the backdrop of the ongoing pandemic, healthcare took the center stage in the Budget. A total of Rs. 2,23,846 crores have been allocated for this sector, this is an increase of 137% from the previous year. An amount Rs. 35000 crores will be spent on vaccines in 2021-22, adding more funds if need arises. A new scheme titled the Prime Minister Aatmanirbhar Swastha Bharat Yojana will started with an outlay of Rs. 64,182 crores over the next six years. This will aim to strengthen the healthcare services in India. This scheme includes setting up Health wellness centers, public health labs and improving the National center for disease control (NCDC’s). Swachha Bharat Mission 2.0 will be launched with an allocation of Rs. 1,41,678 crores over the five years. The supplementary Nutritional Programme will be merged with the POSHAN scheme and a new mission named POSHAN 2.0 will be launched to improve nutritional delivery and outcomes. An increase in healthcare spending is the need of the hour and it will help build capacity and better capability to manage future health related crises.

The Union Budget 2021 Highlights – Infrastructure

The National Infrastructure Pipeline (NIP) will be expanded to 7400 projects, this programme aims to invest in social and economic infrastructure spanning across sectors, to boost growth. A whopping Rs. 5.54 lakh crore has been allocated for capital expenditure in 2021-22, an increase of 34.5% from last year. Furthermore more than Rs. 2 lakh crore will be provided to state governments and autonomous bodies for capex. To provide long term funding for the infrastructure sector, a professionally run Development Finance Institution (DFI) will be set up. A sum of Rs. 20,000 crores has been allocated for the DFI and it is expected that the DFI will build a loan portfolio of Rs. 5 lakh crore within the next three years. Monetisation of potential brownfield assets will be undertaken, as part of this five roads worth Rs.5000 crore will be transferred to NHAI InvIT and transmission assets worth Rs.7000 crore will be transferred to PGCIL. Amendments will be made to the law, to enable foreign portfolio investors (FPI’s) to provide debt finance to REIT’s and InvIT’s. 8500 Km of new highways will be built in different states and there is a total allocation of Rs. 1.18 lakh crore to augment the road infrastructure. Indian Railways have a national rail plan for 2030’s and a total of Rs. 1,07,000 crore has been allocated for railway capex. Further, Rs.18000 crore is allocated to increase the public bus transport services in cities.

The Union Budget 2021 Highlights – Financial sector

The Finance minister proposed that there will be a new securities market code that will consolidate provisions of four different regulations. Insurance FDI will be amended to increase the FDI limit for insurance companies from 49% to 74%. This will provide foreign investors with more control and ownership but with necessary safeguards. To reduce the stress of bad loans from the banking sector, the government will set up a ‘bad bank’ which will be in the form of an asset reconstruction company and an asset management company (AMC’s). As part of its recapitalization plan, the government will further infuse Rs. 20,000 crore into the banking sector. These measures will help the banks to clean up their balance sheets and improve their ability to lend thus increasing credit growth. The budget announced the governments intention to increase the privatization drive in the non strategic sectors. A roadmap for divestment of some public sector companies like LIC and Air India has also been laid out. In FY200 , The government aims to generate Rs. 1.75 lakh crore through divestments. To incentivize more startups, one-person companies can be incorporated without any restrictions on turnover or paid up capital. The one person company can be easily converted to other kind and the residency limit has also been reduced. A Rs.1500 crore scheme will be launched that would provide financial incentive to boost digital transactions. Furthermore, to encourage the development of new financial technologies, a fintech hub will be set up at the GIFT city.

The Union Budget 2021 Highlights – Agriculture

The total agricultural credit target for FY2022 has been increased to Rs. 16.5 lakh crores. The allocation towards a rural infrastructure development fund has been increased to Rs. 40,000 crores. The agriculture infrastructure fund of Rs. 1 Lakh crore will now also be available to upgrade infrastructure in the Agriculture Produce Market Committee (APMC) mandi’s. Five more fishing harbors will be established and the government will set up sea weed parks to promote sea weed farming. More than 1000 mandis will also be included into the e-Nam marketplace.

The Union Budget 2021 Highlights – Taxes

There were no changes made to the income tax rates
Senior citizen above the age of 75, who depend on pension or interest income, will be exempted from paying income tax
Faceless tax resolution mechanism will be set up for small taxpayers.
Aircraft companies will get a tax exemption for one year.
To tax holiday for startups has been increased for another one year and there will be a one year exemption on capital gains from investments in startups.
There will be an agricultural development on some items.
Affordable housing projects will get a tax exemption for one year

The Union Budget 2021 Highlights – Government Financials

Gross expenditure for FY 22 is expected to be 34 lakh crores, for FY21 it is 34.5 lakh crore.
The fiscal deficit for FY21 is revised to be 9.5% of GDP and is expected to reduce to 6.8% of GDP in FY22
The Government will be borrowing Rs.80,000 crores in the remaining two months of this fiscal year. The borrowing for FY22 is expected to be Rs.12 lakh crores.

To Conclude…

The Finance Minister has been able to deploy the resources in the best way possible. Its the classic case of making the best of available resources. And considering its a season of comebacks (Example : recently concluded Border Gavaskar trophy). And there is only way up for the Indian economy.

30 DAYS 30 POSTS CHALLENGE

30 days, 30 Posts Challenge -Let the learning begin.

Hi, 

This is Kritesh. I hope you are doing well.

I’m writing this short post to announce that I’ll be doing a ’30 days, 30 posts’ challenge which starts today. This means that I’ll write one interesting investing article every day for the next 30 days. The blog posts will be published between 10 AM to 11 AM (IST) daily.

I’ve made a small list of topics that I’ll cover in this challenge. Nevertheless, I would love to hear your suggestions, and I will do my best to include as many of the topics you propose in a blog post or maybe even a short video.  I may not be able to get to all of them, but I’ll do my best.

You can send your suggestions by simply commenting on this blog post. Else, if you’re using our mobile app, you can directly send a topic request from the app. 

(Quick note: You can stay updated with the Trade Brains’ upcoming articles by downloading our learning app where you’ll receive daily notification of every new post. Here’s the link to download Trade Brains’ android app.)

I’m excited about this challenge and firmly believe that it will be beneficial to all our blog readers. Thanks again for your support, and I hope to hear from you soon.

Let the learning begin.

Thanks and regards,
Kritesh Abhishek
Founder, Trade Brains.

P.S. I know that many of you might be thinking that shouldn’t a 30-days challenge start on the first day of a month or at least Monday… Well, sometimes you got to do what you got to do. Anyways, new year or new month resolution don’t work, do they? Awaiting your reply. Cheers!!

Dolly Khanna Success Story

Invest Like a Legend: Dolly Khanna Success Story [Portfolio, Bio & More!]

Dolly Khanna Success Story: Every market produces players- those who churn one multi-baggers after another. Dolly Khanna, although the name may not be quite well known as Rakesh Jhunjhunwala, she is doing quite well off.  Her portfolio was quite a mystery for a long time! She has not been interviewed or known before until she bought 1% stake in a company and Indian law makes it compulsory to disclose it to the exchange. Her stake is more than 1% of 14 listed companies now.

Dolly Khanna, the name we hear along with Rajiv Khanna. The couple is based in Chennai. Rajiv Khanna has graduated as a chemical engineer from prestigious IIT Madras. During their initial days, they raised capital from the sale of a family business named ‘Kwality Milk foods’ to Hindustan Unilever in 1995. Since then the golden couple has not looked back. She is in the stock market since 1996 and her portfolio is managed by her husband Rajiv Khanna. Rajiv Khanna is widely known as the brain behind Dolly Khanna’s holdings in the equity market. Her holdings range from the plastic company to the pressure cooker manufacturer.

What makes it interesting is that her stock picks perpetually becomes mega multi-baggers. The couple is quite accurate and expert in picking small potential businesses. Khanna’s are named among the top individual players of the Dalal Street. In 2014, she picked up Nilkamal (India’s top manufacturer of Home and office furniture), the stock which surprisingly has gone up 900% (from Rs 197.30 on March’14 to Rs 1966 as of March’17) in the past 3 years, nearly 10 times.

Their first multi-bagger in their portfolio was Hawkins Cookers. They kept buying stocks till June’09 at the price of 130-140. Today is stock is worth Rs 3400 and also the company has given 70% of its profit as dividends.

Avanti Feeds, Nilkamal, Rain Industry, Emkay Global, NOCIL, PPAP Auto, Sterling Tools, Thirumalai Chemicals, Asian Granito are the few examples of her stocks that went to become multi-baggers once she added them to her portfolio.

Here is the partial portfolio of Dolly Khanna as of December 2017.

Stock Name CMP (Rs) % Change P/E Ratio Nos of shares Value of portfolio % of Portfolio
Rain Industries 386.3 -1.15 19.09 86,30,115 ₹ 3,33,38,13,425 38.77%
Manappuram Finance 104.85 -2.74 12.83 95,29,586 ₹ 99,91,77,092 11.62%
NOCIL 203.1 0.4 48.09 32,16,039 ₹ 65,31,77,521 7.60%
Thirumalai Chemicals 1910 2.37 13.12 1,67,221 ₹ 31,93,92,110 3.71%
Srikalahasthi Pipes 337.9 -1.72 9.33 6,36,923 ₹ 21,52,16,282 2.50%

(Source: Rakesh-Jhunjhunwala.in)

Rain Industry is the prime target of her investment followed by Manappuram Finance, NOCIL, Thirumalai Chemicals, and many more. Her other interesting investment is in Trident where she holds 1.03% of the stake as of Dec’16. Since her investment, the price has risen up to  82.25 as of March’17 form 57.55 on Dec’16, giving 42.92% return, She recently bought a lot of shares of  Butterfly Gandhimathi, which is also a favorite of Ashish Kacholia. But her main target is Rain Industries where she bought 1.27% of the equity in June’17 and increased it up to 2.57% of equity until December’17.

Nevertheless, if the couple sells some stock, then it doesn’t always mean that they have lost their confidence in the company. It’s just that they might have found something else that’s worth more investing. Avanti Feeds is such an example where she sold many of them even at a low price and prices went even high after the sell-off. Though Avanti had given her a fair amount of gain even at that stage.

The above stocks (along with some others) make up around INR 1 billion. as net worth. Also, there are few stocks that are not yet disclosed to the stock exchange as they are below the statutory limit for reporting. So, the aggregate will definitely roar above INR 1 billion!

During a seminar, Rajiv Khanna said,

“Investors have to move beyond value investing and look at growth stocks if they want to find multi-baggers for their portfolio.”

Generally, the couple is a believer in long-term investment, but sometimes they also sell off the stock if it’s giving them a pretty sum of returns at that stage. Rajiv Khanna says that he relies on public information to make his investment, unlike some market analyst who bothers themselves talking to the management of companies.

So how do they decide? Here are his words :

“Like in tennis you play different games on different courts – hard court, clay court and lawn, we also study the market situation and pick our stocks accordingly. It can be either a value stock, growth stock, momentum stock or buying based on technicals”

Also read: D-Mart Founder- RK Damani Success Story [Bio, Facts, Net worth & More]