Be the Beneficiary of ‘The Budget Revolution’
The Indian economy is in the middle of a plunge, some of the challenges on the list are sluggish demand, increasing unemployment and rising retail inflation and hence the expectation with Budget 2020 is quite high. The Budget is expected to be more focused on sectors such as Consumer Durables & FMCG, Real Estate, Banking & Finance and Agriculture among others.
Since rise in the cost of living has compelled everyone to streamline their finances and curb expenses and, hence, everyone is looking forward to the prospect of saving more taxes. In addition to increase in exemption limit of personal tax rates, we expect an increase in deduction limit of housing loan interest and enhanced exemption limit in respect of employer’s contribution to the NPS. Moreover, there are chances that period of eight years for deduction for interest on education loan may be increased.
Budget is expected to focus on agriculture as well as rural non- farming sector including warehousing, waste management and supply chain management. Certain policies to raise farm income are also predicted. A boost to Real Estate and Infrastructure will have a strong multiplier effect across the broader economy and increase the demand for construction material. The government even announced on Dec 31, 2019 the plan of investing 100 Lakh Cr as a part of National Infrastructure Pipeline. GST rates on consumer durables & FMCG might be revised and lowered.
Steps may be taken to boost the credit growth in the economy along with proper support to NBFCs and HFCs. The Financial Resolution and Deposit Insurance (FRDI) Bill could be reconsidered for resolution of troubled financial institutions.
Budget 2020 is likely to focus on India’s most aspiring electricity distribution reform scheme. A maximum amount of around 1 trillion may be allocated to the scheme, which is focused at reducing electricity losses, eliminating tariff gaps and installing prepaid smart meters across 250 million households.
The Budget comes with lot of exposure for different industries which are expected to perform well in a near term. Hence, we have captured that exposure and identified stocks under the specified industries which are expected to surge with the surging Industries and ultimately get benefited through the Budget 2020.
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