New Delhi [India], January 15 : As Finance Minister Nirmala Sitharaman prepares to present her eighth budget, Industry leaders have shared their expectations, highlighting the need for reforms across taxation, fiscal policies, and market operations.
The experts advocated for taxation reforms to drive growth and inclusion.
For the infrastructure spending and fiscal management, Aamar Deo Singh, SVP Research at Angel One, points to high expectations for increased infrastructure spending and measures to revive private expenditures. He notes that the Rupee's record low against the USD has raised concerns about fiscal management, making it crucial for the budget to balance growth aspirations with fiscal prudence.
He said "With the Rupee hitting record lows against the USD, concerns with regard to fiscal management has also come up, so it will be interesting to see how the Finance Minister addresses this major challenge".
Devarsh Vakil, Head of Prime Research at HDFC Securities, emphasizes for clear and predictable tax policies, restoring indexation benefits for debt funds, and revising long-term capital gains tax rates could foster greater confidence among investors.
Vakil also highlights the unfair tax burden on shareholders during share buybacks, suggesting that deductions for the acquisition cost of shares should be allowed.
He said "This budget is expected to address key issues such as FDI, fiscal deficit, disinvestment, and energy transition, but also by restoring investor and public confidence in the government's ability to steer the economy through challenging times".
Shripal Shah, MD & CEO of Kotak Securities, supports the call for income tax relief, particularly for lower-income groups. He believes reducing tax rates for smaller taxpayers would increase disposable income, driving consumption and growth in consumer-driven sectors.
Shah also hopes for moderation in capital gains tax and Securities Transaction Tax (STT) to attract foreign investors and improve market sentiment.
"If the government reduces tax rates for smaller taxpayers, it could lead to higher disposable income in the hands of the common man. This increase in purchasing power has the potential to boost consumption" he said.
For boosting mutual funds and long-term savings, the industry experts stated to address some key issues.
Venkat Nageswar Chalasani, Chief Executive of AMFI, urges the government to prioritize investor confidence in mutual funds by addressing tax concerns. Restoring indexation benefits for debt funds, introducing a Debt-Linked Savings Scheme, and harmonizing tax treatments across investment options could significantly bolster long-term savings.
Simplifying TDS rules for NRIs and revising GST provisions for mutual funds could further reduce compliance burdens and encourage broader participation.
The upcoming budget presents a challenging yet critical opportunity for the government to address macroeconomic hurdles, enhance public expenditure, and implement targeted reforms that could restore investor confidence and propel India's growth trajectory.
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