What to expect from 2nd term’s 1st budget of Modi Government ?

Mrs. Nirmala Sitharaman is going to present her first budget as finance minister on 5th July 2019. This budget may see growth focused and increase consumption stimulation with tax relief announcements.

Here are few key focus area with expectation of market from FM to deliver in this budget :

NBFC’s Crisis :
As non banking financial companies plays major role in funding infra projects; which is a key focus area of Modi government, expectations are that Government may inject fund to ease liquidity crunch hovering around NBFCs.

For Agricultural Sector :
Increasing farmer’s income agenda was in lime light during 2019 election campaign, so it is very likely that government will focus on reforms that will lead to prioritization this sector

Housing for All :
Government target to built 5 cr homes in 5 years. FY 18 Budget announcement of building 51 Lakhs houses in rural areas. GOI taken various steps in affordable housing,(reduced GST in last financial budget). In FY19 budget, increasing interest repayment exemption on home loans from Rs.2 Lakhs may be another steps towards this sector.

Taxation Slab expectations :
Government not in any position to give tax benefits to individual or companies. On the contrary, may try to shore up revenues by introducing or increasing some taxes or remove tax exemptions.

Automobile Industry :
Automobile is another sector which is facing challenges as auto sales are down and in lowest comparing last 2 decades. Under Green initiative, Government is pushing use of Electrical Vehicles and low emission vehicles, to re-energize this space FM can announce reforms in import duties of various components in Indirect space, while in Direct space can subsidies sector through additional deduction for capital expenditure, R&D expenses etc.

These are brief pre-budget assumptions. Many issues like slowing economy, increasing trade war tensions, tensions across borders, Current account deficit , disinvestment plan etc will be areas to listen on.

Disclosure :
All discussion above are just predictions only & article is based on assumptions of market & market experts.

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