Decoding Union Budget 2019: Highlights & Expectations

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The Government is soon going to unveil the Union Budget 2019 today with investors hoping to see good investment in Agriculture sector, as Modi government will try to woo the voters ahead of the general election 2019. The speculations were going around whether the Finance Minister would be able to issue a full-fledged budget proposal or simply follow the protocol of releasing an interim budget. The Finance Minister, Piyush Goyal is all set to present the interim budget 2019-20 in the parliament, marking the last budget of PM Narendra Modi-led BJP government ahead of General Elections 2019. Here are a few things that are expected to be addressed in the Upcoming Budget announcement.

What Does Finance Minister Have Up His Sleeves in the Union Budget 2019?

1. After a string of setbacks in the recently held State Elections for the BJP, the Modi Government is expected to try to cultivate trust amongst rural and middle-class people by providing farm relief measures, tax cuts or BPL pension. This will boost demand to consumption stocks which will ultimately benefit the market.
2. With a concentration on the rural segment, the government is expected to strike the right balance between fiscal prudence and growth.
3. It is also expected that the government will project economic growth of around 7.5% for the next FY while expanding capital spending on railways, roads, and ports by 7-8%.
4. In the health segment, the budget allocation is likely to upsurge by 5 percent than what was in the preceding year.
5. Metals, particularly Gold can expect speculation around a duty cut.
6. A discount of approx two percentage points on loans for businesses with annual sales of less than Rs. 5 crores can also be offered as the government is expected to compensate banks for the costs. Besides, Rs. 4,000 crore-rupee capital infusion can be proposed for general public-sector insurers.
7. In the Automobile sector, reduction of goods and services tax can be seen for electric vehicles and batteries.
8. Better digital infrastructure can be placed for the rural areas. There can even be the abolition of the angel tax to boost the start-up culture. Also, exemption from GST for spectrum and license fee payouts is expected. The reduction in spectrum fees and cuts in import duty on telecom equipment which is currently at 20 percent can be seen on papers.
9. Higher tax exemption for the small businesses and the middle class is also anticipated. However, the corporate rate tax cut from 30% to 25% can be put on hold until the elections.

What to Expect from the D-Street?

Analyzing the last ten years data, the bears have dominated the markets on the Budget Day for the 6 out of 10 times. So what can one expect from the markets in 2019? Well, the experts of the industry believe that the markets may react to the fiscal measures taken by the Modi Government and if the measures are not in line with the expectations of the people, then there might be deeper corrections ahead.

For more information on the Union Budget 2019 and our experts' analysis on the same, stay tuned with us at MySIPonline. Further, if you are willing to know whether it will affect your investment decision or not, particular mutual fund investment, then also watch out for our upcoming reports on the same.

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