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Budget 2020- Make or Break chance January 30 2020Budget 2020

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Budget 2020- Make or Break chance

Indian economy is currently on an inflection point where the big businesses/ companies are becoming bigger and the SME is still not able to revive from the GST/ Note ban shock. NBFC fund freeze is haunting both the SME as well as those sitting on the Indian policy desk in Finance ministry

 

This budget will lay down the path for the $5 Trillion economy vision seen by our PM. There are many factors which need to be balanced in the right direction, so the fiscal and growth both engines work to propel the economy in the balanced way.

Many expect this budget to be a non eventful budget as most of the capital booster does are already being announced by the FM before the budget, nevertheless BUDGET is and always be a time of expectations, resolutions and commitment for Economy and Indian markets both, with many factors ranging from slowing demand, low industrial output and the overall GDP growth pegged at an 11-year low of 5%.Lets see what expectations does India Inc has from the budget.

 

1.      Personal Tax cut sweetener: This is the major demand from both the industry and tax payer community at large this time. There is a major tax outgo for an individual earning income between Rs 5 to 10 lakh. As the middle class is the real growth driver of the economy a cut from 20% to 10% will add a cheer to the Beneficiaries at large.

 

2.      Section 80C: This is a most loved Income tax section by Tax payers, which ironically is not enhanced since 2014, despite a dynamic change in spending of individuals. This section mainly includes investment in government securities, LIC, mutual fund ELSS along with payments for children’s tuition fee and housing loan repayment etc.

 

3.      Tax cut for Partnership and LLPs: Government got a historic applause when it tweaked the corporate tax cut on the downside recently, but still MSME sector is on the Partnership or LLP mode of taxpaying, where they pay around 30% plus cess. Section 32AC should be tweaked in order to provide some relief to the ailing this business community.

 

4.      Sector specific boosters: Government has done marathon meetings with almost all sector heads recently; we could expect some specific sectors viz. NBFC, Real estate, Infrastructure etc.

 

5.      GST recalibration: The Ex-chequer is feeling the heat of slowing GST collections and funding the GST deficit of states, we could see a major recalibration GST tax regime where there could be only two GST slabs covering the whole GST spectrum and a gradual start of covering products like petrol and diesel in the GST regime.

 

 

Madam FM is walking on a very tight rope this time with slowing of GDP and increase of deficit, it will be very interesting to see the balance route taken by the government this time and how the capital market participants sitting both in domestic and international territories respond the to the Budget initiatives this time

www.indiratrade.com

Happy Investing!

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