With the implementation of the Goods and Service Tax (GST) from July 2017, the Union Budget no longer has an impact on corporate earnings due to indirect taxation. However, there are several variables in the government's financial projections, which will determine the future path for various sectors.

For example, if the divestment target for FY19 is set above Rs 90,000 crore, the market may construe that as a possibility of another mega-merger similar to the recently concluded stake purchase by ONGC in HPCL. The government is likely to mop 20 per cent higher than the FY18 divestment target of Rs 72,500 crore. This may result in an overhang on state-owned energy stocks, such as IOC and BPCL. Similarly, excise duties on petrol and diesel - currently out of the purview of GST — are a major source of revenue for the government. Excise duty projection of less than Rs 2.2 lakh crore may point to the government's intention to cut excise duties. This will be positive for the stateowned marketing companies. With the petrol and diesel prices at a record high and crude price at $65-70 per barrel, the OMCs are finding it difficult to pass on the entire burden to consumers, thus compressing their marketing margins.

Besides, the extent of subsidy amount over and above Rs 25,000 crore for FY18 will determine to what extent the government has provisioned for the higher crude oil prices. A higher provision means lower subsidy burden for oil producers including ONGC and Oil India.

Here are the key factors investors need to keep an eye on:

Insurance Sector
Any increase in the income-tax rate for life insurance companies will be a negative. Tax rate for life insurance companies is 15 per cent compared with 34 per cent for other sectors

Expansion of crop insurance coverage, which accounts for 15-20 per cent of gross insurance of general insurance companies, will be a positive.

NBFC
The more the government sticks to stated fiscal deficit target, the lower the bond yields would be. The move will be positive for NBFCs which are more dependent on the wholesale market for funding

Custom duty of Gold
Reduction in gold import duty from current level of 10 per cent.

Banks
Possibility of bank fixed deposits receiving tax treatment similar to debt mutual funds. Debt funds currently have long-term capital gains with indexation benefit for maturity of more than three years. A positive for banks. The amount of recapitalisation for banks may not affect the sentiments much given the off-balance sheet recap plan of Rs 2 lakh crore

Infra companies
In the previous budget, the power sector lost the infrastructure status under the section 80IA. Investors would keenly watch whether other sectors such as roads, ports, and rails would retain their status.