Budget 2015-16: Expect focus to be more on improving macros - Arihant cap

Arihant capital markets' preview on Union Budget 2015-16

Narendra Modi led NDA government will present its much anticipated first full‐fledged budget on 28th Feb, 2015. Finance Minister Arun Jaitley' is expected to unveil a comprehensive package of measures to lift investment sentiment and turn the country into a preferred destination for foreign capital. Focus is like to be on revival of investment, drawing investment into domestic manufacturing sectors and removing hurdles apart from this there may be significant changes in personal income tax slabs to lift consumer sentiments to spur up the economy.

FM’s priority will be to drive growth along with fiscal prudence. He will budget for higher planned expenditure, financed through higher tax receipts, disinvestment and lower subsidies.

From stock market perspective the focus will be on reforms, governance, removing hurdles for growth clarity on GST and fiscal discipline. FII’s will be keenly watching levy of minimum alternate tax (MAT) on foreign portfolio investors, some of them having received notices from the tax department after tribunals backed the imposition of the levy in some instances. Any announcement related to GAAR will impact their sentiment.

Government may remove Commodities transaction tax (CTT) which will be cheered by commodities market.

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To spur up foreign investments in India government may improve dispute resolution and simplify tax framework.

"Few sectors which may hog limelight in the budget are Defence, Renewable energy and Infrastructure. Apart from this we expect focus to be more on improving macros", says Arihant capital markets research report.

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