Pre budget Note
Narendra Modi Government is presenting first full
fledged budget this week.
The “Achchhe
din” Slogan is in the mind of people and expecting relief from this Government.
As everybody’s belief, I too believe that this is the
Pro Growth Government. But… Please Wait, whose growth? “Growth of country?” or “Growth
of certain class of People?” Remember, A
Dynamic Government will take all possible action to bring fiscal discipline. And
Discipline is never a well accepted idea among any citizen class. But, if we
want to see our country on Real Term Growth Path, we should not be surprised by
some “unexpected and shocking” proposals in this budget.
Why I am cautious about Budget proposals? Government has
to win subsequent state elections. The primary agenda is to acquire majority in
upper house (Rajya Sabha). Hence, some populist proposals are expected to satisfy
large number of society.
On the other hand, Government is likely to eye on raising
the revenue. So, it may give surprise by abolishing/reducing some of the tax benefits;
limit the possibilities of tax arbitrage and tax evasion techniques. Within the
tax rules, there are ways to reduce tax burden. Smart people benefit from such
proposals. I strongly believe that there will be rationalization in tax benefits
schemes. Some “Popular among select class” tax savings benefits may be the
history.
So, in my one line take is “Only Expect the unexpected
from this Budget”.
There is a probability of benefits to defence and
“Make in India” intensive industries and giving boost to Import substitute industries
thus targeting more employment generation. So focus will be on controlling
Fiscal Deficit and Current Account Deficit.
We put a cautious message in our February News letter for
portfolio restructuring prior to announcement of budget & Smart investors
have started portfolio restructuring activities. Naturally, front runners will
have advantage over others.
Mr. Siddharth Shah.
Chief Officer, Shalibhadra Master Investment Broker.
Experience of 33 years in Investment and Financial Industry.
Contact - +91-9426516073
Email - invest@shalibhadra.in
Facebook - Shalibhadra Master Investment Broker.
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