Market veteran Raamdeo Agrawal believes a no change Budget would be the best for stock markets, adding that equities are in very good equilibrium and there should not be any changes in taxation.
"No change is the best thing, but they should make it more attractive for the masses, make it investor friendly," Raamdeo said, when asked about his expectations from the upcoming Union Budget.
The veteran investor also pitched a radical idea for the government, suggesting it to implement tax exemption for income up to Rs 12 lakh per annum. "We should encourage consumption by handing more money to tax payers", Raamdeo said.
Raamdeo added the Budget should need not focus on what the stock markets are expecting. "You cannot build a budget for markets, you have to run it for what is good for the country," he said.
The veteran investor said India needs to further boost consumption, and cited the slowdown in growth of GST collections for June, which expanded at the lowest rate in three years. The month of May and June also saw assembly elections and severe heatwaves that may have disrupted economic activities in some sectors. Data shows that the pace of growth of GST collection has fallen below double-digits for the first time since the pandemic.
Substantiating his argument, Raamdeo said despite near-8 percent GDP growth rate for two years, he still has not seen a boom in shares of FMCG companies like HUL, Nestle and Britannia.
Shares of HUL are down 7 percent in last one year, while Nestle India is up 12 percent in last one year. However, Raamdeo remains extremely upbeat on the long-term growth prospects, and wagered that he sees India as an economy with $10 trillion market capitalisation in four years.
The total market cap of all BSE-listed companies had reached $5 trillion or over Rs 414.46 trillion for the first time in May this year, showing a climb of over $633 billion since the start of the year.
Speaking to CNBC-TV18, Raamdeo said that government should make equity investing even more attractive for the retail category. "The capital market play will become even bigger", Raamdeo said. Replying to a question on the recent talk of equalising transaction charges for market intermediaries, the veteran investor said all the talk around transaction charges is only to streamline the incentive to intermediaries, and not aimed at the common investor.
On July 1, the Securities and Exchange Board of India (Sebi) had issued a circular, stating that market infrastructure institutions (MIIs), which include stock exchanges, depositories and clearing corporations, should charge a uniform fee from their members and not offer any rebate for bringing more volume.
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