Finance Minister Nirmala Sitharaman will present her fourth Union Budget on February 1 this year. With the new variant of coronavirus entering India, the economy activity is likely to be adversely affected this year. That will reflect in the stock markets too which have turned volatile ahead of the annual event. Any move to cut costs related to stock transactions can neutralise the effect of any probable correction in the market which is trading near its all-time high.
Here's a look at what market experts said on their expectations from the upcoming Union Budget.
Sunil Nyati, Managing Director of Swastika Investmart said, "The market wants a Budget that should be reformist and pro-growth where last year's Budget headed in the right direction. Therefore, we need further momentum to reforms and growth in the upcoming Budget.
The market will like more clarity and pace in the government's asset monetisation and divestment programme. The world is facing many supply-side issues and India can turn some challenges into opportunities therefore the government should focus on some areas in the upcoming Budget.
In terms of taxation related to the stock market, I believe STT should be removed or at least reduced because initially it was introduced in the place of long-term capital gain tax. Now, we have both LTCG and STT which is not fair for the Indian investors. Stock market penetration is increasing in India and it is anticipated that the government will take policy measures to ensure that the Indian market becomes more investment-friendly in comparison to other emerging markets where reducing LTCG and STT could be a good step in that direction. The transaction cost in India is too high and LTCG and STT are seen as a sentiment dampener for the market."
Jyoti Roy, DVP- Equity Strategist at Angel One said, "We expect that the Union Budget will focus on targeted spending while maintaining fiscal discipline. We expect the fiscal deficit for FY23 to be well below the budget estimate of 6.8% for FY2022 due to better than expected tax collections. We expect that the government will continue its focus on providing support to the rural economy and manufacturing sector through increased spending and PLI schemes. We also expect the government will raise allocation to the infrastructure and housing sector given their high multiplier effect on the economy. We do not expect any major announcement in the Union Budget and believe that the government will continue with its reform process even outside of the Budget."
AR Ramachandran, Co-founder & Trainer, Tips2Trades said, "With the COVID 19 2nd and 3rd wave wreaking havoc to the Indian economy and thereby impacting millions of lives, investors and consumers alike are expecting a strong Budget 2022. Retail investors would like to have STT reduced or even abolished and again have 0% tax for long-term investments to boost investor sentiment. From an industry perspective, sectors like education, hotels, travel & tourism, auto & auto ancillary & the hospitality sector would be expecting several relaxations in terms of easy access to loans or reduction in taxes to survive & thrive in the coming year."
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