Dinesh Thakkar – CMD, Tradebulls:
It was a good Budget, which focused on housing and for rural development. Readjusting income tax will provide incentives to investment and consumption. The macro-level announcements are positive for the economy. Increased focus on transportation sector, which has a higher multiplier effect on the economy, will also contribute to GDP growth. No changes in taxes on the stock markets and clarifications on FPI taxes will go down well with the market.
Aasif Sir – Director, Tradebulls:
Market reacted positively on the budget as long term capital gain tax has not been tinkered with and no changes in GST. Government has focused on affordable housing and rural infrastructure as it can boost for lower and middle income and translate into consumption. Government has also focused on boosting spending power of common man by reducing the income tax rate. Reduction in corporate tax rate in SME segment will directly re-rate EPS of small cap companies.
• Fiscal deficit for 2017-18 pegged at 3.2 percent of GDP.
• Fiscal deficit target for next three years pegged at 3 percent.
• Total allocation for rural, agricultural and allied sectors for 2017-18 is Rs 187223 crore, which is 24% higher than last year.
• 133-km road per day constructed under Pradhan Mantri Gram Sadak Yojana as against 73-km in 2011-14.
• 3500km railway lines to be put up.
• Service charge on rail tickets booked through IRCTC to be withdrawn.
• Foreign investment promotion board (FIPB) to be abolished .
• Allocation for infrastructure stands at a record Rs 3,96,135 crore.
• Small companies with turnover up to Rs 50 crore to pay 25% corporate tax against 30%.
• No cash transaction above Rs 3 lakh.
• No changes in long term capital gain tax.
• Reduction of income tax rate from 10% to 5% for tax slab of Rs 250,000 to Rs 500,000.
• Surcharge of 10% for those whose annual income is Rs 50 lakh to 1 crore.
Sector wise impact
• Govt committed to double farmer income in five years – Positive for Auto- Tractors
• Govt allocated Rs 10,000 cr for recapitalisation of PSU banks, Resolution of financial firms amendments to help banking sector – Positive for PSU Banks
• Govt allocated Rs 3.96 lakh cr for infrastructure – Positive for Cement, infrastructure companies
• Govt hikes excise duty on various lengths of cigarettes by 2.5% & 6% - Negative for Cigarette companies
• Govt to create innovation fund for secondary education, Govt to set up 100 India-International skill centres, Govt to set up 100 India-International skill centres – Positive for Computer Software
• Govt allocated Rs. 64,0000 cr for National highway – Positive for Construction and Engineering companies
• Instead of build-up area, carpet area will be counted for affordable housing; Govt proposes to finish 1 cr houses by 2019 for those living in kachcha houses – Positive for housing companies.
• Govt proposes to make changes in capital gains tax for housing from 3 years to 2 years, Re-financing of housing loans to give impetus to real estate sector, Affordable housing to be given infra status – Positive for Real estate and housing finance companies
• New rules for pricing medical devices should benefit common man – Negative for Hospital and Medical Services
• Govt cuts basic customs duty on LNG to 2.5% from 5%, Govt proposes to create integrated PSU oil major – Positive for Refineries and LPG providers
• Govt reduces existing tax rate for personal income of Rs 2.5-5 lakh to 5% from 10% - Positive for FMCG, Retail
• Govt proposes carry-forward of MAT to 15 years from 10 years – Positive for Textile
• Transport sector allocated Rs 2.41 lakh cr – Positive for Transport and Logistic
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