Now is budget time, and the countdown to the 2022-23 Union budget has begun. If the pandemic does not wreak havoc on Budget Day, Finance Minister Nirmala Sitharaman is likely to present her fourth budget on February 1 this year.
Last year, the government announced various stimulus packages that provided a long-awaited path to a strong recovery but also sent inflation soaring. The Federal Reserve has already hinted at rate hikes, and the Reserve Bank of India may also be considering raising rates and tightening liquidity in the financial system.
India’s economy will face a bumpy ride as coronavirus cases rise, thanks to a new concern. The real estate industry expects the government to increase capital spending as lockdowns and restrictions are in place. As such, the budget is expected to boost the affordable housing and rental housing ecosystem and strengthen existing financial infrastructure, thereby providing liquidity to distressed real estate projects. Likewise, a focus on the infrastructure sector is expected to increase the employment potential of the industry.
The hospitality industry is looking to lower taxes and incentives in offering interest-free loans, subsidies and lower tax rates. In the budget, there may be announcements about education. The government could provide tax breaks for Covid-19 patients and their families, as well as more deductions for medical expenses. The insurance industry hopes to include 5% of the consumption tax on health insurance from the existing 18% consumption tax, and in addition, micro-insurance, sachet products, etc. are exempt from consumption tax. There will be more road authority allocations for government kittens. Because this government needs to fully push its divestment agenda so that the government should have enough liquidity to support and sustain this massive capital expenditure, drive consumer demand and restore confidence in the banking system.
Indian equities delivered a stunning return of around 32% in FY21 from January to October this year on the back of a favourable macroeconomic environment, policy stimulus from governments and central banks, strong corporate earnings and inflows from retail and institutional investors . These factors have helped Indian stocks outperform their peers. But with the end of the year, the tide turned to Indian stocks. As a result, the Indian market has corrected 8-9% from its all-time highs between October and mid-December.
Complete News Source : FINANCIAL EXPRESS
