Budget: The government's ordeal against the expectation of the people

Mumbai, Ta. 31 January 2020, Friday

The next fiscal year's budget is likely to be important in many ways, amid sluggish demand, a weak tax rate, and the economic growth rate of fiscal year 5-7, which is expected to fall to a five-year low with 5 percent. Against this backdrop, the biggest challenge against the finance minister lies in accelerating development and shaping the country's economy. There is increasing pressure on the government to increase spending and control the fiscal deficit for the current fiscal year.

Important things in the budget for retail investors include fiscal mathematics, taxation, personal income tax and equity market related taxis, disinvestment plans, and targets for fiscal year 1-3. It will also look at the steps the government is taking to increase economic growth.

Now the government has to look into the increase in demand. This requires more money available for consumption in the hands of the consumer. Steps will need to be taken to increase the cost of infrastructure and create new employment for the agricultural sector. Empowering industries, such as construction, housing, roads, construction and irrigation, will have to be strengthened.

If these industries gain strength, then there will be an immediate increase in consumption. Rural demand has been drastically reduced, with significant reduction in farm income. The measures that increase the income of the rural, especially the agricultural sector, are expected to be announced in the budget.

After the reduction of corporate tax, the government is expected to reduce the personal income tax rate or increase the tax exemption limit. Doing so may result in an increase in personal consumption and investment.

From a stock market perspective, investors and players in the stock market are hoping to capitalize on capital markets like STT, Long Term Capital Gain Tax, Dividend Distribution Tax, etc., adding that Motilal Oswal Fine Finance's Ajay Kay Keen added. If made, mutual funds and equity investments will only increase Or may be found.

The government will have to deepen the country's corporate debt market to raise money to succeed in the infrastructure investment plan of Rs 1 lakh crore, so policy measures are expected to be announced to increase the attractiveness of the corporate debit market. In addition, certain incentives and upgrades may come for the NBFC, Realty, Auto and Insurance sectors.

However, due to the fiscal situation that has been challenged as a result of the low growth in the rate of levy of taxes, the finance minister may not be particularly exempt from declaring steps that increase demand. In addition to supporting the economic growth rate, the finance minister will have to exercise a balanced budget for fiscal discipline and reforms.