Budget Key Takeaway

In Union Budget, FM today introduced a new optional personal income tax system, a new tax dispute settlement scheme and unveiled a 16-point plan to revive growth in the country.

FM said this Budget will boost income and purchasing power of the people. This Budget spoke about the clean, reliable and robust financial sector for achieving the ambitious target of USD 5 trillion economies. This year’s Economy Survey projected economic growth to rebound and hit 6%-6.5% in the next financial year starting April 1.

Budget 2020 remains clearly focused on empowering the common man through several policy reform initiatives. With a specifically rural-focused, agri-centric budget, FM has sought to address the woes of rural India, especially the farmer class.

While the government remains committed to medium-term fiscal consolidation, any material strengthening in India’s public finances will likely be limited in the near term, and the debt burden will remain sensitive to changes in nominal GDP growth.

The Finance Minister has done away with the dividend distribution tax which is a big boost for companies. Added, extensive Infrastructure development plans like Delhi-Mumbai & Bangalore-Chennai Expressway and Railways Infra development will keep the public spending ticking with higher employment opportunities. This will make India an attractive investment destination.

Measures to attract foreign capital, undertake disinvestment (especially through LIC stake sale via an IPO), facilitate the consolidation of public sector banks and offer relief to MSMEs are some of the green shoots. It remains to be seen if such announcements are backed by an equally robust execution.

In a normal scenario, this budget would have been considered as a balanced budget, providing a tax benefit to the common man, corporate and focus on farmers’ incomes, but the situation required more than what meets the eye looking at the weakness in the market post Budget Speech.

However, we believe any big event provides opportunities in the market. Mentioned are the stocks can be bought for investments in the current situation which has strong future growth prospects.

Author: Mr.Siddharth Sedani, Vice President – Equity Advisory, (Investment Services), 1st Feb 2020

Disclaimer:  Anand Rathi Share & Stock Brokers Ltd. (a part of the Anand Rathi Group), which is regulated by SEBI, India, has issued this report. “Investment in the securities market are subject to market risks, read all the related documents carefully before investing.”The information herein was obtained from various sources; we do not guarantee its accuracy or completeness. Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any currencies or any options, future or other derivatives related to such currencies (“related investment”). Anand Rathi Share & Stock Brokers Ltd and its affiliates may trade for their own accounts as market-makers/ jobbers and /or arbitrageurs in any currencies of this issuer(s) or in related investments and maybe on the opposite side of public orders. Anand Rathi Share & Stock Brokers Ltd, its affiliates, directors, officers and employees may have long or short positions in any currencies of this issuer(s) or in related investment banking or other business from any entity mentioned in this report. This research report is prepared for private circulation. It does not have regard to the specific investment objectives, financial situation and particular needs of any specific person who may receive this report. Investors should seek financial situation and the particular needs of any specific investment inany currencies or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects might not be realized. Investors should note that income from such currencies, if any, may fluctuate and that each commodity’s price or value may rise or fall. Past performance is not necessarily a guide to future performance. Foreign currency rates of exchange may affect the value, price or income of any commodity or related investment mentioned in this report