Union Budget 2020 Expectations

Union Budget 2020 Expectations

The buzz for the Union Budget 2020 has been humongous. People have been speculating and coming up with their own cause and effect theories. All people are expecting is an efficacious budget plan that will revive the economy and get it on the right track.

In a situation like ours it is difficult to decide which sector needs to be prioritized and which can be secondary where the allocation of budget is concerned.

The sharp lag of consumption and investment has been alarming which played a role in the revenue shortfall. The economic slowdown has intensified as a result of this the government is likely to cut down on spending.

Weak corporate earnings were also a contributor to the shortage of revenue. It is a challenging budget for finance minister Nirmala Sitharaman and she may face a difficulty in balancing whether to stick to fiscal consolidation or run a higher deficit to push growth.

As far as investors are concerned they are waiting for a tide of opportunities to make through the ongoing fiscal scenario. An improvement in the business climate is awaited cautiously. The budget should implement policies to boost start-ups more than it already has. The potential in the public sector should be tapped in this budget.

 

 

Removal of long-term capital gains (LTCG) tax on equity mutual funds is highly anticipated and will do more good than harm to the mutual fund investors. There is a significant opportunity for development in the global financial markets.

The news of cut in tax rates is spreading like wildfire and raising people’s expectations. It leaves more disposable income in the hands of the middle and lower middle-income group. This is an opportunity to prod demand which will oil the rusty issues of consumption. This will help to pick up investments as well.

To improve the investment climate in the country the immediate priority of the government should be higher domestic consumption which can be supported by bettering the infrastructure. This will raise demands in other sectors like steel, cement, etc. Another upside to this will be the increase in employment opportunities which will solve a lot of problems for the country, one of them being the falling GDP.

How we can revive the economy after taking these steps is by triggering investment cycles where the fiscal expansion is such that we do not have to worry about the fiscal deficit slippage leading us to sustainable growth. The corporate sector has massive untapped potential that can save the economy from any more wreckage. The right allocation and execution can prove to monumentally stabilize the current scenario.

We hope that the Finance Minister will address all these concerns in her 2nd Union Budget presentation and nudge the economy back on track.

 

Shahera Qureshi
Sushil Finance

Has rich experience as a content writer. She has worked with Bombay Stock Exchange (BSE) and has graduated in BMS. She is an avid reader and has impeccably proficient research skills.

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