Indian Finance Minister will present the Union Budget on February 1. Different stakeholders have different expectations as it comes during the third wave of Covid. How will the government balance growth momentum with fiscal consolidation?
What are the key expectations?
Supply side reforms - Boost local manufacturing, supporting entrepreneurs and accelerating asset monetization.
Capital Expenditure - Maintain Rs 5.5 Trillion in capex.
Divestment Pipeline - LIC IPO expected in March. What else?
Mutual Funds - Intra scheme switching within Mutual fund schemes should not be considered as sale and therefore no capital gains to be charged. Parity of tax treatment between Mutual fund units and ULIPs
Individuals - Increase 80C, provide more help to home buyers and tax rationalisation.
What does all this mean to investors?
Yes, we need to be aware of key taxation changes but the budget don't impact our investments or goals beyond that!! Budgets might be fun to track, discuss with friends and fills up news but beyond that have minimal impact!!
There is volatility before budgets but whatever the markets did prior to budget has NO correlation to how the markets performed by the year end.
Budgets will come and go every year but what investors need to focus is on their goals and asset allocation!!
Focus on the controllables and if you aren't the FM you don't control the budget!!
Source: Moneycontrol, Livemint, ET, Business Mind, Trinkerr