NEW DELHI: Finance Minister Arun Jaitley last full Budget sent the domestic equity market into a tailspin for a while before the indices recovered smartly to trade with significant gains.
The S&P BSE Sensex was trading over 200 points higher within half-an-hour of the Budget presentation after tanking over 400 points at one point.
Here’s a look at the major announcements that hurt investor sentiment on Dalal Street
Fiscal slippage: FY19 deficit at 3.3%
Jaitley revised the fiscal deficit for FY18 to 3.5 per cent from 3.2 per cent targeted earlier. Although, the slippage has been nominal, it did dampen the spirit. For FY19, he set a fiscal deficit target of 3.3 per cent against 3 per cent he had mentioned last year. This meant the government has deferred the fiscal consolidation process.
This could be the result of either higher-than-expected spending or lower-than-expected revenues.
FM Jaitley announced a 10 per cent levy on capital gains of over Rs 1 lakh without the benefit of indexing with immediate effect. Before the Union Budget, market veteran Madhusudhan Kela had warned that the market was not factoring in a LTCG tax on equity. Any change in status quo, he said, could trigger a correction in the market. And in a knee-jerk reaction, Sensex crashed over 400 points.
No change in personal income-tax slabs
The government left the personal income-tax structure unchanged. In his last Budget, the FM had lowered the income-tax rate for individual assesses with income of Rs 2.5-5 lakh to 5 per cent from the 10 per cent.
No comments:
Post a Comment