Written by Sushil Tripathi
The Union Budget 2022 will be announced in a few days. This year the budget comes at a time when the country’s economy is recovering rapidly.
Macroeconomic conditions in the country are improving and all growth indicators are giving positive signals. In such a situation, the stock market and investors also have great expectations of the budget.
The market is looking for a budget that is growth oriented and stimulates demand. The market also wants big announcements for those sectors that will create maximum jobs and boost the economy. Regarding this Zee deal, he spoke to Sunil Nyati, Managing Director of Swastika Investmart Ltd, to find out what his expectations are for the budget.
Government spending remains high
Sunil Nyati said people have high expectations for the 2022 budget. The market is looking for a budget that is both growth-oriented and reformative.
The budget is intended to support the country’s economic progress. He said we hope the government keeps tax spending high and focuses on infrastructure.
Last time the government had backed growth. Although many announcements have been made for the infrastructure sector, it must continue.
The employment-oriented sector should be promoted
He said that the focus of this budget should also be on the sectors that generate high numbers of jobs.
There should be some big announcements in the real estate and auto industries as these two industries can provide jobs and growth across multiple sectors.
The government should increase the tax benefit for home loans, which has been almost constant for several years.
Focus on increasing consumption
The government took several steps to boost the economy over the past year, but there was no direct focus on stimulating consumption. Because of this, the market is anticipating some significant news for the white-collar class.
At the same time, the market expects the government to provide more clarity on asset monetization and divestment. While the world faces several challenges on the supply side, India can use this as an opportunity. Again, the market will keep an eye on whether the government makes an announcement in the budget on this.
What are the expectations of taxation?
Regarding stock market taxation, Sunil Nyati said STT should be removed or reduced. Because it was originally introduced instead of long-term capital gains, but now both LTCG and STT are applicable, which is not fair for investors.
The size of the stock market is increasing in India, the government is expected to take policy measures to make the Indian market more investment-friendly than other emerging markets. So reducing LTCG and STT can be a good step in that direction.
Transaction costs are very high in India, so LTCG and STT are seen as sentiment dampeners.