Union Budget 2017-2018 Review: Arihant Capital

The Union Budget 2017-18 laid out by the Finance minister explicitly focuses on three point agenda- Transform-Energise- Clean. The FM stuck to the path of fiscal consolidation along with focusing on infrastructure, rural economy, affordable housing, curbing of black money and digitisation. Though this was not even vividly a populist big bang budget as was widely anticipated by market participants, the FM clearly striked the right chords by hitting capital expenditure growth and social spending.Equity Market Perspective The equity market has reacted positively post budget. The market participants feared that the government could raise the tax on long-term capital gains. The FM did not change long term capital gains tax norms. This is the big positive news for the equity market as any changes in tax norms related to the equity markets would have negatively hurt investors' sentiment. The fiscal deficit target for FY17 is pegged at 3.2% and 3% for the next three years.Farmers• Target for agricultural credit in 2017-18 has been fixed at a record level of Rs 10 lakh crores.• Farmers will also benefit from 60 days’ interest waiver announced on 31 Dec 2016.• To ensure flow of credit to small farmers, Government to support NABARD for computerisation and integration of all 63,000 functional Primary Agriculture Credit Societies.Rural Population• Over Rs 3 lakh crores spent in rural areas every year.• Aim to bring 1 crore households out of poverty and to make 50,000 Gram Panchayats poverty free by 2019.• Women participation in MGNREGA has increased to 55% from less than 48%.Youth• Innovation Fund for Secondary Education proposed to encourage local innovation for ensuring universal access, gender parity and quality improvement to be introduced in 3479 educationally backward districts.• Skill Acquisition and Knowledge Awareness for Livelihood Promotion programme (SANKALP) to be launched at a cost of Rs 4000 crores. SANKALP will provide market relevant training to 3.5 crore youth.• A scheme for creating employment in the leather and footwear industries along the lines in textiles sector to be launchedDisclaimer: The views and investment recommendations expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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