Budget 2015: Key reforms to stir up capital market in India

This is one of the most positive phases in the economy when the budget for FY2015-2016 would be declared. Are we expecting anything exciting from the budget? Yes, as in this year we have already seen the government taking lot of important steps each month to curb inflation, control CAD and to give a boost to economy.
We have seen lot of important steps for manufacturing sectors like the Make in India campaign. A boost in infrastructure will uplift the whole economy by creating huge job and growth opportunities for people across the country. And through Infrastructure Investment Trust (INVITS), the government has already started laying the foundation for the growth in Infrastructure sector in the FY2014-2015.

CAD is already quite under control with fiscal deficit now less than 4.9%. And I am sure the focus would continue to be the same in the upcoming budget as well. Here are a few expectations from Union Budget 2015-16.

1) Curb gold imports

To control the import of gold, we might see new schemes being launched by the government which will provide a good alternative apart from gold to hedge against inflation.

2) Raise tax limit exemption

Last year the tax limit exemption was extended upto Rs 2.5 lakh, which can now be further extended to Rs 3 lakh. This will act as a major relief to the majority of tax payers in the country and and would also give a boost to their savings. This would further bring up investment in the economy. Many developed countries are already opening up the doors for Investment in India, we might see important policy revisions to boost further Investment in India by foreign countries.

3) Boost banking and infrastructure

The banking and infrastructure are the two main sectors for which major positive announcements may be done. The government already has plans to dilute the shares of public sector banks to citizens of India and retail investors. The move will be welcomed by the people because it will provide the required liquidity to the public sector banks. It will also offer required resources to banks to support productive growth in the economy.

4) Goods & Services Tax (GST)

I also expect GST to be a positive revolution for the country which was stressed in the last financial year budget. Aa major move to expedite the process would be further welcomed.

5) Reduce securities transaction tax

On capital markets front, a reduction in STT of financial trading transactions can boost capital markets and further infuse confidence of domestic traders and investors to invest in the markets.

About the author: This article is authored by Rohit Gadia, founder & CEO, CapitalVia Global Research Limited