Macquarie is of the view that defence and capex growth will likely to be muted in FY20 with the key beneficiaries being Hindustan Unilever, Hero MotoCorp and Jubilant Foodworks
Finance Minister Piyush Goyal announced a number of sops for farmers, middle-class and other taxpayers. The proposed giveaways included Rs 6,000 per year to farmers who have up to 2 hectares of land and full tax rebate to people earning up to up to Rs 5 lakh.
This will impart a direct benefit to approximately 3 crore taxpayers comprising self-employed, small business/ traders, and salaried class.
Goyal also increased the standard deduction by Rs 10,000 to Rs 50,000, thus leaving even more net-in-hand income for the middle class.
The Interim Budget also proposes to do away with taxing the notional rent on the second residential house property owned by a taxpayer.
Here’s a look at what top broking firms from across the globe think about the Budget:
CLSA: Good balance of political and economic priorities
Interim Budget is a good balance of political and economic priorities as the capex growth is likely to be muted and oil subsidy adequately provided. The government capex growth will likely suffer in FY20.
The firm in its note stated that the headline fiscal numbers are satisfactory and overall steps augur well for low-ticket items of expenditure.
Macquarie: Defence, capex growth likely to be muted
According to Macquarie, the fiscal maths is a tad too aggressive presented by the Finance Minister. However, the 2-wheeler, consumption and real estate sectors are winners with the latter getting a meaningful push in the Budget.
Credit Suisse: Consumption stimulus should support growth
Credit Suisse highlighted that the downward slide in fiscal deficit ratio was not disrupted. On the other hand, consumption stimulus should support growth, it said. It also said that the structure reduces risks of high and sticky inflation.
UBS: Change in policy stance from ‘calibrated tightening’
FY20 revenue targets look ambitious, according to UBS. It is of the view that populism will still be in focus and consumption will be a boost to the economy. UBS expects a change in policy stance from “calibrated tightening”.
HSBC: Budget squarely focused on rural and middle class
According to global research firm HSBC, there have been slips on fiscal front for both FY19 and FY20. The Budget squarely focused on rural and the middle class, it believes.
It is of the view that the central government has slipped on fiscal deficit target for FY19 and has put fiscal consolidation on hold for FY20.
Citi: Scale of populist programs at the lower end of expectations
Citi is of the view that it was a modest fiscal slippage despite election populism. Fiscal deficit for FY19 slipped marginally to 3.4 percent of GDP against the target of 3.3 percent.
According to the research firm, deficit meets the FRBM norm of 0.1 percent of GDP reduction while the scale of populist programs is at lower end of expectations.
Disclaimer:-The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.
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