Prebudget 2020
The Budget will be announced on February 1, 2020 by Finance Minister Nirmala Sitharaman. The markets over the year witnessed the effects of a slowing economy where GDP has fallen below 5% and fiscal deficit has widened above estimates to around 3.8%, a steep slippage from the Budgeted target of 3.3%.Growth slowdown has hit the government's finances hard with the fiscal ending with a likely revenue shortfall of Rs 2 lakh crore.
Here's a quick look at how different numbers stack up:
GDP growth: 5% (Lowest in 11 years)
Pvt Consumption: 5.8% (Lowest in 7 years)
Investments: 1% (Slowest in 17 years)
Manufacturing: 2% (Lowest in 15 years)
Agriculture: 2.8% (Lowest in 4 years)
This year's Budget will have an unenviable task to balance the expectations with reality. There is a lot of hopes riding for a revival and a boost to the economy from the current slowdown, leading to a current cheer in the market.The current need of the hour is to spur consumption, accelerate the investment cycle and employment as GDP for FY20 has slowed down below 5%. In order to achieve this, the upliftment of rural sector has to be done who act as the pillar of the Indian Economy. Various programmes run by the government in the form of NREGA, Sampoorna Grameen Rozgar Yojana (SGRY), Swarnjayanti Gram Swarozgar Yojana (SGSY), Sansad Adarsh Gram Yojana (SAGY) Pradhan Mantri Gram Sadak Yojana (PMGSY) etc will provide employment opportunities thereby the consumption and auto sector will pick up. However in the urban sector changes in personal taxes will positively impact the economy in a broad basis.
NBFC’s which plays a crucial role in the upliftment of the rural economy is currently facing liquidity crisis which in turn has effected important sectors like micro, small and medium enterprises (MSMEs), automobiles and consumer goods. Thereby we are expecting some measures will be taken by the government in the upcoming budget providing ease to the NBFC sector.
The most beaten sector since demonetization is real estate. It has been facing low buyer sentiment, sluggishness in demand and non-availability of liquidity. The liquidity crisis has resulted in lots of unfinished and stuck projects that are not only affecting the housing supply and demand, but also employment. So, it can be expected that the government will take some measure in order to uplift the buyer sentiment.
For all the initiative to be taken the government, funding is required where the government is already lacking. However, it's expected that the government would do significantly better in terms of disinvestments in the next financial year, as a few of the large-scale divestments have got pushed to next financial year. However, if the government plans to raise fund via bonds, it will negatively impact the banks and exporting sectors like IT and Pharma will lead a positive rally. The government earlier provided for corporate tax cut which was cheered by the market, now some tweaking in DDT and LTCG tax can be expected.
Let's see how FM gonna manage the big elephant in the sugarcane field!!!
Here's a quick look at how different numbers stack up:
GDP growth: 5% (Lowest in 11 years)
Pvt Consumption: 5.8% (Lowest in 7 years)
Investments: 1% (Slowest in 17 years)
Manufacturing: 2% (Lowest in 15 years)
Agriculture: 2.8% (Lowest in 4 years)
This year's Budget will have an unenviable task to balance the expectations with reality. There is a lot of hopes riding for a revival and a boost to the economy from the current slowdown, leading to a current cheer in the market.The current need of the hour is to spur consumption, accelerate the investment cycle and employment as GDP for FY20 has slowed down below 5%. In order to achieve this, the upliftment of rural sector has to be done who act as the pillar of the Indian Economy. Various programmes run by the government in the form of NREGA, Sampoorna Grameen Rozgar Yojana (SGRY), Swarnjayanti Gram Swarozgar Yojana (SGSY), Sansad Adarsh Gram Yojana (SAGY) Pradhan Mantri Gram Sadak Yojana (PMGSY) etc will provide employment opportunities thereby the consumption and auto sector will pick up. However in the urban sector changes in personal taxes will positively impact the economy in a broad basis.
NBFC’s which plays a crucial role in the upliftment of the rural economy is currently facing liquidity crisis which in turn has effected important sectors like micro, small and medium enterprises (MSMEs), automobiles and consumer goods. Thereby we are expecting some measures will be taken by the government in the upcoming budget providing ease to the NBFC sector.
The most beaten sector since demonetization is real estate. It has been facing low buyer sentiment, sluggishness in demand and non-availability of liquidity. The liquidity crisis has resulted in lots of unfinished and stuck projects that are not only affecting the housing supply and demand, but also employment. So, it can be expected that the government will take some measure in order to uplift the buyer sentiment.
For all the initiative to be taken the government, funding is required where the government is already lacking. However, it's expected that the government would do significantly better in terms of disinvestments in the next financial year, as a few of the large-scale divestments have got pushed to next financial year. However, if the government plans to raise fund via bonds, it will negatively impact the banks and exporting sectors like IT and Pharma will lead a positive rally. The government earlier provided for corporate tax cut which was cheered by the market, now some tweaking in DDT and LTCG tax can be expected.
Let's see how FM gonna manage the big elephant in the sugarcane field!!!
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