The fiscal deficit target of 3.4 percent of GDP for FY19 and FY20 is encouraging and was welcomed by the D-Street
Interim Finance Minister Piyush Goyal managed to strike the right balance between growth and fiscal prudence which D-Street acknowledged by closing the day in the green. And analysts’ community gave a steady score of 4 out of 5 for the last Budget by the current Modi government.
The fiscal deficit target of 3.4 percent of GDP for FY19 and FY20 is encouraging and was welcomed by the D-Street. The Budget proposals are mostly positive for sectors related to consumption, which include FMCG, auto, consumer durables, banks and fertilizer/agri.
“The Modi government has seemingly once again managed to defy the convention by pulling off a Budget, which seems more in the nature of a full Budget rather than an Interim Budget,” Jayant Manglik, President, Religare Broking told Moneycontrol.
“The Budget has all the ingredients of a thumbs-up budget, as it focuses on increasing the disposable income in the hands of a large section of the economy i.e. middle-income group and farmers. Thus, the Budget is worthy of a 4-star rating,” he said.
Interim Budget 2019 stood tall on every parameter by keeping a balance between the spending and maintaining fiscal deficit target.
The government managed to walk the tight rope by restricting the overall fiscal deficit target at 3.4 percent (in FY19 and FY20) despite generous spending. The fiscal deficit for FY21 has been pegged at 3 percent.
The Budget also announced the first of its kind schemes of allocating Rs 6,000 per year for farmers owning up to 2 hectares of land and increasing 9 percent allocation in MGNREGA totalling to Rs 60,000 crore.
However, the big announcement came for the middle-class salaried people, rural masses and unorganised sector laborers. The move is aimed at BJP winning back its core constituency of the Urban middle class, suggest experts.
“Interim Finance Minister Mr. Piyush Goyal made a historic announcement of no tax on income up to Rs 5 lakhs and for investment-savvy individuals, gross income up to 6.5 lakhs will not lead to paying tax which will spur consumption in the economy,” Foram Parekh, Fundamental Analyst – Equity, Indiabulls Ventures told Moneycontrol.“On account of many historic announcements made in the Interim Budget this year, we would like to give a thumbs-up to the Budget giving a rating of 4.5/5. The only concerning factor is that LTCG tax was not abolished,” added Parekh.The Great Diwali Discount!
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