Markets gains for fourth session ahead of key budget2 min read . Updated: 05 Jul 2019, 09:26 AM IST
- Analyst are focusing fiscal deficit and borrowing targets with focus on any tax reforms
- Sensex index rose 0.30% to 40,026.50 in the early trend
Mumbai: Indian markets gained for the fourth consecutive sessions as investors awaits key key budget which will be presented by finance minister Nirmala Sitharaman due later on Friday.
At 9.30 am, the S&P BSE Sensex index rose 0.30% to 40,026.50, while the NSE Nifty 50 gained 0.13% to at 11980.45 points.
Analyst are focusing fiscal deficit and borrowing targets with focus on any tax reforms. According to a Bloomberg survey, the government will widen the budget deficit target to 3.5% of GDP at upcoming budget, up from a February estimate of 3.4%.
"Given the clear-cut mandate, the government has never before opportunity to make bold announcements in this budget. Apart from privatization or corporatization of the government institutions to limit the drag on the balance sheet, measures to drive investments, which have been under pressure, would be welcome. Reforms in the agriculture sector to boost the income of the farmers could be a major focus. To further stimulate economic growth and accelerate corporate earnings, the government should also consider a reduction in the corporate tax rate for all the companies" said Arun Thukral, MD & CEO at Axis Securities .
Finance minister Nirmala Sitharaman will present her maiden budget on Friday at a crucial juncture in the economy when growth is slowing down and so are revenue collections. Consumer demand which has so far been the only engine driving the economy now looks vulnerable
Earlier on Thursday, chief economic adviser said the government will keep its fiscal deficit under control as it sees a rebound in economic growth from a five-year low. The Finance Ministry said growth will probably reach 7% in the current fiscal year that began on April 1. The government will seek to avoid undermining private investment by widening the fiscal deficit, Krishnamurthy Subramanian, author of the Economic Survey report and chief economic adviser, told reporters Thursday
"The government’s Economic Survey – a precursor to the Budget presentation on 5 July – indicates that fiscal consolidation remains a policy priority. The Survey suggests the government’s focus will be on an investment and export-led growth model rather than a consumption-driven one. The Survey focuses on micro and macro level reforms to improve the investment climate and human capital. In our base case, we expect the government to retain the interim budget fiscal deficit target of 3.4% of GDP for FY20, though owing to lower revenue growth it will ultimately be a struggle to meet", said Nomura Research in a note to its investors.
So far this year, Sensex and Nifty have gained nearly 10% each while foreign investors bought $11 billion and domestic institutional investors sold ₹7,173 crore in equities.