The Budget: Mixed reaction from the industries and markets
The Budget had scored many hits and misses just like the on-going football world cup. The investors were confused to quite an extent after following the finance minister Arun Jaitley’s maiden Budget. Eventually, after an exceptionally volatile intra-day trading that saw the Sensex move more than 800 points, the benchmark lost 72 points.
Jaitley decided to accept his predecessor’s 4.1 % deficit target as a challenge, and that sent negative ripples to the market. Accepting FDI in defence, real estate, insurance, infrastructure and many other sectors were welcomed by all. The inability to scrap the retrospective tax or even to reduce subsidies, or announce a timeline for GST, were the most obvious negatives.
However the infrastructure sector received a host of incentives.Expenditure on roads, both for NHAI and rural ones, have been more than doubled. Clarification of tax laws on infrastructure trusts and changes in the 5/25 scheme for bank lending to infrastructure gave the sector’s stocks a boost. The banks that raise funds for infrastructure lending won’t have to earmark part of these for SLR/CRR requirements, or even priority sector lending. Introduction of REITS and InvITs also were a welcome move for the real estate and infrastructure sectors.
The Budget did not give the SEZs the much-needed relief from minimum alternate tax (MAT) and dividend distribution tax imposed in the 2012 Budget. Though Jaitley has promised to revive SEZs, the times lines are measures to be taken for them is not yet clear.
Source- The Financial Express
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