This year’s Union Budget holds utmost importance in the country as it will be putting the growth back on track. This is a very heavy task of achieving a $5 trillion target by 2024.
The pandemic has badly impacted on the government finances in the last fiscal year. Coming towards the Union Budget expectations, both the direct and indirect taxes including GST can be out of the budget target somewhere.
The fiscal deficit has been estimated around 135 percent of the budget target for April to November session of FY2020.
Hence, there is a very less chance of negotiation on the stimulus part due to high deficit value.
However, apart from all the losses, on the market front, the Sensex has recently met the target of 50,000. Equity benchmarks have prospered and also participation of retail investors have increased in the last nine months.
These all signals are directly targeting towards the upcoming Union Budget. According to experts, the upcoming budget should be more focused towards tax incentives provisions.
Also, a point to be considered is, tax computation is very complex, therefore, the new budget can consider simplification of categories into three.
These three categories should be business income, long-term capital gain and short-term capital gain. Also, the Indian government should consider a fiscal stimulus for economic revival.
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