Vikrant Shekhawat : Feb 03, 2025, 05:00 PM
Reliance Share Prices: The new budget of the Government of India has tried to strengthen the financial position of the middle class by giving them a big relief in income tax. Under this budget, the tax on income up to Rs 12 lakh has been effectively reduced to zero. This move is not only a big relief for the middle class, but it is also expected to increase consumption in the country. Its direct impact can be seen on the country's largest retail company Reliance Retail and its parent company Reliance Industries.The share price of Reliance Industries, which is India's most valuable company, has fallen by 13% in the last 6 months. Since the company's stock split, its share price has seen a steady decline. However, due to the tax relief given to the middle class in the budget and the government's focus on increasing consumption, Reliance shares are expected to rise by up to 10%.Effect of budget on middle classThe government has tried to increase the purchasing power of the middle class by giving them tax relief in the budget. By effectively reducing the tax on income up to Rs 12 lakh to zero, the middle class will have more disposable income. This will have a direct impact on the country's consumption, which is expected to increase the sales of companies like Reliance Retail.Apart from this, the government has also increased focus on the power sector. Efforts to make the electric vehicle (EV) and battery segment cheaper can also benefit Reliance Industries, as the company has invested heavily in these areas.Possible jump in Reliance Industries stockAccording to Dharmesh Shah, Vice President of ICICI Securities, Reliance Industries stock can see a rise of 5 to 10% in the coming days. Currently, the share price of Reliance is around Rs 1250. Shah believes that due to the relief given to the middle class in the budget and the government's focus on increasing consumption, there is growth potential in the shares of Reliance as well as other companies like Bajaj Finance, Kotak Mahindra Bank, Tata Consumer, Infosys, UBL, Mahindra & Mahindra, Eicher Motors, Titan, Havells, SBI Cards and Indian Hotels (Taj brand).Government's focus on demand factorTwo main factors work in the economy - first, spending by the government on infrastructure and capex, and second, increasing demand in the country. In the last 10 years, the government has invested heavily in infrastructure and capex, which helped in handling the country's growth rate during the Kovid epidemic. However, during this time the investment of the private sector has been low.This time the government has focused on the demand factor in the budget. By giving tax relief to the middle class, the government has tried to increase consumption in the country. India has always been a demand rich country, due to which the Indian economy showed its strength even during the recession of 2008 and the Kovid crisis of 2020. Keeping this in mind, the government has worked to provide relief to the middle class this time.ConclusionThe tax relief given to the middle class in the budget will not only strengthen their financial position, but it is also expected to increase consumption in the country. This can directly benefit companies like Reliance Industries, whose shares are likely to rise in the coming days. The government's focus on the demand factor can prove to be helpful in accelerating the country's economy.