BackWhat the Dalal Street expects from today's Budget
Investors are keeping a close eye on BudgetThe Budget would set the foundation for the policies and reforms for the next five years: Experts
PremiumNew Delhi: Indian markets closed higher on Thursday, a day before the Budget that is expected to cut taxes on business and raise spending to breathe some life into a stagnating economy. The Economic Survey, which was tabled on Thursday, forecast economic growth could get back up to 7% this year, but cautioned it will face challenges keeping its fiscal deficit in check.
Vinod Nair, head of research, Geojit Financial Services.
“The market has a valid hope on this Budget given a weakening economy and falling earnings while the mandate has enlarged. Eventually, a stimulus is expected to improve the economic situation. But supportive measures will be limited given weak fiscal revenue. Other than this, the Budget is likely to be a simple document with long-term visions and focus over segments like agriculture, FDI, and manufacturing in India."
Jagannadham Thunuguntla, Senior VP and Head of Research (Wealth), Centrum Broking
“Markets have been building optimism that Budget can elicit economic resurgence which is at five-year low. If Budget can offer fiscal breather and solution to continuous corporate defaults, markets will greatly welcome. Business sentiment is precariously poised, and Budget provides great opportunity for new finance minister to rebuild consumption and investment confidence. Further, as its first budget of Ms. Nirmala Sitharaman, it helps market participants to discern her thought process for the forthcoming five years of policy-making. Further, as US and China have embroiled in a trade war, the budget can build-up on Indian advantage to increase exports."
Motilal Oswal, CMD, Motilal Oswal Financial Services
"The market is looking forward to the first Budget from the NDA government after being re-elected as it would set the foundation for the policies and reforms for the next five years. The biggest expectation from the new Finance Minister is to revive growth and bring the economy back on track. There has been an increasing pressure on the government to increase spending and to defer the fiscal deficit targets. However, going by the past track record of the NDA government, we expect the fiscal prudence to be maintained.
The government need to ensure that private investments also picks up as that would be a key driver for long term economic growth. Some of the other key factors to look out for in the budget would be the investment plans for job creation, increasing tax compliance, simplification of GST, attracting foreign investments, divestment plans, recapitalization of banks, etc.
In the first budget presented during the previous regime, the Finance Minister had proposed to reduce the corporate tax from 30% to 25%. The government gradually extended this benefit of 25% tax slab to businesses with ₹250 crore in sales, However, the large companies with sales above ₹250 crore contribute bulk of the corporate tax collections and continue to remain in the 30% tax slab. Any relief to these large corporates could help in boosting investments as well as corporate earnings.
The market would cheer if the budget is able to deliver on these expectations and presents a strong reform agenda for the next five years."
Amar Ambani, President & Research Head, YES Securities
“We expect the government to persist with reasonable levels of deficit on the fiscal front, as indicated in their earlier budget. The FM’s reassurance on sticking with the path of fiscal prudence in the years ahead will be equally important. The next on the agenda would be the much-needed boost to economic growth. Towards this front, the most pertinent measure would be providing capital buffers like a MSMSE fund, to make liquidity widely available."
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