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 

a) Infrastructure

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:

1. Nominal GDP growth estimated at 14.4% for FY22.
2. Fiscal deficit estimate for FY21 revised to 9.5% and for FY22 stands at 6.8%.
3. Net market borrowing of government bonds for FY22 at INR 9.67 trillion vs INR 12.73 trillion in FY21 (Revised Estimates).
4. Disinvestment receipts for FY22 are pegged at INR 1.75 trillion, with revised estimates for FY21 at INR 320 billion.
5. Senior citizens above 75 years of age having only pension and interest income will be no longer required to file ITR.
6. Tax assessment period is now reduced to 3 years from 7 years for all taxpayers.
7. Exemption on Tax Audit- Limit enhanced to INR 100 million of revenues from INR 50 million till last year.
8. Tax holiday for Affordable housing to be extended by one year till 31st March 2022.
9. 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.