January is almost over and for those who follow the budget closely, it means 1st Feb is that much closer.
Well, before we get to the best part of this article today here are few details you may want to know.
Budget presenter: FM Nirmala Sitharaman
When: 1st February 2022 at 11 am.
Where: Lok Sabha TV (Live). The other channels will also telecast the Budget.
Now that the pertinent details are out of the way, let us get on to the most interesting part. We are sure you are as fascinated as us by the countless articles that have been gracing the headlines all January in the run-up to the Budget.
What makes it interesting are the expectations from everyone right from experts, investors, businesses to manufacturers, retailers, shop owners, and the general public.
All have a wish list that doesn’t seem to end. We thought putting these wishes all together in a neat list would give you a better idea of what people expect from FY2023 Budget.
Here we go…
Expectations of the industry: People expect the finance minister to announce plans that may help kindle India’s capex cycle while laying the roadmap for economic consolidation. They expect the government to announce a higher outlay on capital expenditure, new healthcare schemes to cement India’s place in the global supply chain.
A tax-neutral GST, whether the rate implies tax rate hikes for various sectors is still unknown. Moreover, there are chances of excise duty reduction on petroleum products. Investment experts believe the markets expect more support for sectors like housing, auto, auto ancillaries along with improved PLI-measures in multiple sectors.
The MSME sectors expect more financial support from the government along with reforms for import substitutes that encourage self-reliance and domestic manufacturing. If these policies include green energy, they will help to create a sustainable economy reducing domestic reliance on energy imports.
Tax expectations: Tax experts expects the PPF limit to increase from Rs 1.5 lakh under 80C as it was intact in the last budget. They expects Ttax relaxations can to boost the real estate sector and lower GST rate on raw materials.
The working population expects a rise in the standard deduction while the tax-free income slab increases from two lakh now to five lakhs. Given the changes in working patterns most expect a WFH allowance to be announced. Experts want an increase of Fifty thousand rupees Rs. Fifty thousand in the tax benefit on home loans for interest and principal repayment from the 2-lakh and 1.5-lakh, respectively. Investors expect the government to take steps to reduce tax litigation and encourage compliance through better oversight of transactions.
Market and Investing expectations: The digital payment industry played a vital role in bringing in transparency and formalization in the economy. Many investors expect this trend to continue and want the government to consider incentivizing Venture Capitalists (VCs) and Private Equity (PEs) players and investors to fund R & D, and technology upgradeation in India.
Experts believe the government must offer incentives to fintech companies that lend to the under-credited segment as it could help uplift the society and economy too.
Bond investors feel India’s inclusion in the global bond indices is crucial from a long-term capital availability point of view.
Investors expects measures that will make India globally competitive allowing labor-intensive sectors a level playing field, promote exports of value-added products, etc. Monetization of public assets, disinvestment of PSUs stake is the need of the hour. However, an increase in the spending for social and health welfare initiatives and capex in railways and infrastructure are crucial for economic revival.
We’ve tried to offer a general view of what people expect. However, whether these expectations will be met, or the finance minister has more reforms in the kitty will remain a mystery till the 1st of February.
Get your questions answered on YouTube Live session, The Budget’s Impact On Your Investments, on 2nd February 2022 at 4.30 pm. Register here.