A budget is a statement of intent and going by the budget if it has to be defined with one word.it is “Rural”.
Positives
Positive for MSME as companies upto 250 crores will pay a corporate tax of 25%
Capital outlay increased in the higher double digit from PSUs leading to a rise in the capex cycle
An allocation on rural for 1.5 times the market price in msp is a uptick for rural consumption.
Negatives
Imposition of ltcg and ddt on dividend income
Non adherence to fiscal deficit targets set earlier is a worry for bond markets
Interesting
GST numbers hold the key to fulfilling the expectations of all stakeholders
Questionable
Income tax revenues growing by 20% for the year forward seems challenging
Revenue receipt from taxes in general have been a little on the optimistic side.
Impact on Equity markets
Our view is markets will take it on the chin and move ahead. we may see temporary redemption on account of investors wanting to book their long term capital gains.
Debt Markets
As the fiscal deficit is expanding it is good to stick to short term funds with a 3 yr outlook to get indexation benefits.
Currency
Exporters and non residents may benefit.
Alternate assets
Taxation is similar as was last year.They would provide stability to portfolios.
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