In line with the undeniable and imperative need to fuel sustainable growth recovery for an economy that is emerging from a pandemic ridden year, the Union Budget placed duly warranted importance on quality of expenditure. Key themes in the Budget were
b) Manufacturing and
c) Agriculture & Social
Our perspective on the Union Budget which also includes Equity and Fixed Income market outlook. A few key highlights are enumerated below for your reference:
- Nominal GDP growth estimated at 14.4% for FY22.
- Fiscal deficit estimate for FY21 revised to 9.5% and for FY22 stands at 6.8%.
- Net market borrowing of government bonds for FY22 at INR 9.67 trillion vs INR 12.73 trillion in FY21 (Revised Estimates).
- Disinvestment receipts for FY22 are pegged at INR 1.75 trillion, with revised estimates for FY21 at INR 320 billion.
- Senior citizens above 75 years of age having only pension and interest income will be no longer required to file ITR.
- Tax assessment period is now reduced to 3 years from 7 years for all taxpayers.
- Exemption on Tax Audit- Limit enhanced to INR 100 million of revenues from INR 50 million till last year.
- Tax holiday for Affordable housing to be extended by one year till 31st March 2022.
- FDI in insurance companies increased to 74% from 49%.
Equity Market Outlook – As the Union Budget primarily dwells on infrastructure and manufacturing sectors to attract capital and augment sustainable long-term growth, we view this budget as a directionally positive one with special emphasis on boosting cyclical growth.
Fixed Income Outlook – The market will closely watch the RBI monetary policy for indication on the additional borrowing and overall guidance.
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