The Battle is Set: Mighty’Bulls’ v/sthe Ferocious ‘Bears’. Battleground: The Stock Market.
The traders are keenly going to watch the interim Union Budget as it unfolds in the parliament today amidst high hopes from Sh. Pranab Mukherjee. In the wake of expectations of some tax sops Real Estate stocks are trading on the higher side on Monday, hours before the unveiling of the interim Union Budget in parliament.
What People Say – Expectations of the Common Man
Introduction of its Third Stimulus Package: An important challenge in front of the Finance Minister will surely be related to a possible & unavoidable introduction of the third stimulus package in the wake of the on-going economic meltdown. In order to boost the economy the government will have to address some of the key issues.
Reforms: Looking at the current global economic situation it is expected that the forthcoming budget will go for tax reforms in a big way. The government will have to strike a balance between the tax reforms and their impeding effects on the common man. This will best be achieved by assuring that the benefits of growth directly reaches the masses for example, lowering prices of daily use commodities and also in some non-monetary terms like providing security and improving the law & order situation especially in the wake of the recent Mumbai terror attacks.
Indirect Taxes: There is a widespread speculation that this year Interim budget would include some relief provided in the form of excise duty cuts for industries like automobile and cement to spur demand in these sectors. Government has already taken some steps towards the same like cutting the Cenvat by 4% across the board in the month of December.
Direct Taxes: Analysts are not expecting major changes on the Direct Taxes front except simplifying procedural hurdles for the industry at large. The government might change the current Income Tax rules to provide 100% tax breaks on profits to many IT units as promised under the Special Economic Zone Act. Currently, this relief is not provided to them because they are formed under their parent companies and not as independent units.
Subsidies: The government will have to find ways to provide support to the agricultural sector by way of subsidies. India’s farmers have huge expectations again especially in getting additional subsidies from the Finance Minister in 2009.
Arresting Job Losses: There has been a lot of hue and cry by the masses in India with the overnight layoff strategies being adopted by many companies. The common man expects some sort of reformative policies in this years budget including assurances that layoffs if unavoidable, would be carried out in a systematic fashion and not with an overnight announcement by CEO’s and handing over of pink slips the next morning, as it happened in the case of Jet Airways not too long ago.
Inflation: Sky-rocketing price rise in commodities of general use has led to a very high inflation. There are lot expectations from the forth coming budget to incorporate steps to arrest inflation.
Industry: As industrial growth is a long-term proposition, it is rather difficult to predict as to what measures the Union Budget (2009-2010) will take to reverse the slowdown in the manufacturing sector. The Finance Ministry would have to provide stimulus to the micro and small enterprises through some well-designed & effectively executed policies.
Dis-investment: This is an important area of the on-going structural reforms. The forthcoming budget will surely have many proposals on dis-investment, which will directly or indirectly speed up the process of dis-investment.
Source : http://www.surfindia.com
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