- 01 Jul 2024
- ICICIdirect Research
Maharashtra state government presents populist budget
News: In a recent state budget presented by the Maharashtra government, it has proposed various measures to support the people of the state especially the low-income group people. The measures include cut in state taxes on petrol and diesel which become cheaper by 65 paisa and 2 rupees respectively (for Mumbai region), ₹ 1,500 per month allowance to women in the age group of 21-60 (costing ~₹ 46,000 crore annually), subsidy to support dairy farmers, free electricity for water pumps (up to 7.5 hp) for farming community, installation support for solar water pumps and skill development program for youth that offers a monthly stipend of ~₹ 10,000 (costing ~₹ 10,000 crore annually), among others.
View: This is positive development for the domestic automobile space with rise in income levels can potentially support sales volume for the industry. Maharashtra is the 2nd largest volume contributor for the industry with its share in total sales volume pegged at ~11% with Uttar Pradesh being the largest with share at ~13%. It clocks highest volumes for the industry in PV (~12% of total volumes) and CV (~13% of total volumes) domains. The potential beneficiaries of this could be M&M and Tata Motors in our coverage universe. We shall closely watch the commentary of OEMs on this development.
Impact: Positive