Below are Perspective on today's Union Budget 2021 By Mr Motilal Oswal, MD & CEO, Motilal Oswal Financial Services
“The FY22 budget has been much better than the market’s expectations. The feared and anticipated measures around Covid-Cess/higher capital Gains tax/Wealth Tax etc did not materialize. This will provide a huge relief to market and economy and help in sustaining the buoyant sentiments in the economy. Government has clearly articulated the focus towards Infra and Capex spending with five key measures:  Capex spends proposed to go up by 26% in FY22 vs. FY21 RE  Setting up of Development Financial Institution  Setting up of ARC/AMC to deal with stressed assets  Asset monetization plans in various segments and  List of CPSE’s for divestments. We believe this will push the CAPEX spending in the economy and augur well for the overall economic revival of India. The significant increase in allocation to the Healthcare sector should lift the general well-being in the economy, in our view.
Separately, the honourable FM also announced several measures for relaxation of compliance and procedural burdens in multiple spheres of activities (taxation being the most prominent).
The extension of tax exemption schemes in Affordable Housing is also welcome as it can provide a good multiplier effect on the GDP.
All in all, a very good budget which avoids the pitfalls of raising taxes and at the same time provides a boost to the CAPEX/infra spends in the economy”
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