Budget 2024: Can fiscal consolidation reassure investors and boost market sentiment?

Budget 2024: Industry experts believe that favorable policies to promote stock market education and reduce taxes on capital gains should be implemented in the upcoming Interim Budget to increase stock market participation and stimulate economic growth

Sangeeta Ojha
First Published19 Jan 2024, 01:18 PM IST
Budget 2024: Industry experts believe the Narendra Modi Government should make favorable policies to promote stock market education.
Budget 2024: Industry experts believe the Narendra Modi Government should make favorable policies to promote stock market education.

Budget 2024: The Finance Minister is all set to present her sixth Budget in a row on February 1, 2024. Since it is general elections year, the outgoing government will present an Interim Budget or Vote-on-account. 

Industry experts believe the Narendra Modi Government should make favorable policies to promote stock market education and reduce taxes on capital gains to increase stock market participation and encourage economic growth.

“In the past decade, the number of stock market participants has increased by nearly 100%. With the increased internet, the market is also seeing good growth. The coming decades will bring the best timeline for investing in the market,” said Arun Singh Tanwar, Founder and CEO, of Get Together Finance (GTF).

Stock market education

Stock market education should be promoted. According to Arun Singh Tanwar, the financial literacy rate is not impressive in India currently. 

He added that the government should take more initiative and a good fraction of the money should be assigned to teach students the importance of personal finance and budgeting at a tender age.

Lowering capital gains tax

All the more, taxes on the capital gain of the stock market should be cut to create more involvement in the stock market. A reduction in capital gains tax might have a substantial impact on investment behavior and encourage stock market participation. Lowering these taxes may encourage individuals to invest more actively, thus increasing market activity and liquidity. As a result, trading volumes may increase, encouraging economic growth and contributing to overall market expansion.

“Policymakers face a tightrope walk between fiscal rectitude and nurturing expansion. While investors desire discipline after pandemic excess, shock therapy through steep taxes or capex cuts has rattling effects. However modest infrastructure boosts alongside rationalization of non-merit subsidies signal positive intent. This fine line - optimizing growth within a consolidation glide path - is what equity and debt participants hope to see in the budget. Savvy fiscal calibration, not swinging the axe, keeps markets upbeat,” said Ravi Singhal, CEO of GCL Broking.

Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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First Published:19 Jan 2024, 01:18 PM IST
HomeMarketsBudget 2024: Can fiscal consolidation reassure investors and boost market sentiment?

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