The Modi government will present fourth budget of its second term on February 1, 2023. Ahead of the Budget, the market has turned volatile with bouts of rally in a few sessions followed by string of losses and vice versa. Sensex is currently trading at 60,500 level and Nifty at the key 18k mark.
With Budget 2023 to be presented within less than a month, stock market participants are waiting for the government to announce friendly measures for the market. Here's a look at what market analysts expect from Budget 2023.
Aamar Deo Singh, Head Advisory, Angel One said, "Markets are overall optimistic about the Budget, given that it's the last full budget ahead of next year's general elections. On a macro level, steps to enhance domestic sources of growth along with exploring new areas and opportunities for exports, are going to be crucial going forward. Focusing on the MSME and offering PLI linked incentives to this sector, would give a fillip to the growing aspirations of a rising India, as this sector along accounts for almost 110 million jobs while contributing 30% to GDP. Job creation, infrastructure push, ease of doing business, incentives for renewable energy projects & EVs, are also expected from the Budget."
"Further, the private sector investments need to pick up, which has been floundering for quite some time and government support in this area is very crucial. Overall investment as a percentage of GDP stands around 30%, which needs to grow. Also, markets hope that incase tax rebates are offered, that would have positive impact on the consumption expenditure, furthering a pick-up in demand, across sectors. So, it will definitely be interesting what all the government has to offer, given the challenges being faced on the energy volatility, slowdown in global economy and fears of recession in US & Europe. Let's keep our fingers crossed and wait for the D-Day to unfold," Singh added.
Vinit Bolinjkar, Head of Research, Ventura Securities said, "Capital expenditure target can be raised to Rs 9.0-9.5 trillion from Rs 7.5 trillion set for FY23. It will significantly improve the infrastructure spending and enhance the business for other elide sectors such as cement, metals, capital goods, etc. The PLI scheme is limited to large & mid-corporates and can be extended to MSMEs. MSMEs are the 2nd largest employers and provide employment to 110 mn people. Extension of such schemes to MSMEs will improve productivity and exports. LTCG up to Rs 1 lakh is exempted from income tax, while STCG is only adjusted under the basic exemption limit of individual income tax, which is Rs 2.5 lakh. STCG can also be allowed with some tax exemption limit. 80C limit could be raised to improve savings, which will indirectly reduce extra spending and inflation. Fiscal deficit target can be lowered by 50-60 bps from 5.9% in FY23 to 5.3% in FY24."
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