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Budget 2020: Few Ideas




Budget 2020 is much awaited event amidst more than needed negativity created by media and publish houses. I am confident that Mrs Nirmala Sitharaman shall one of the finest budgets this year to fix economy and another step towards 5 trillion economy

 Already in last three months many steps have been taken in this direction. Corporate rate cuts and liquidity to NBFC are the most important ones. Adding to this higher depreciation on cars bought till March 31 2020 helped in boosting car sales

 Here are few proposals which may be considered for the budget to boost consumption and lift market sentiment and higher growth
Abolition of Long Term Capital Gain

 Last two years non of the asset class has generated returns for investors. Long term capital gain has proved to be big dampener for the broader markets and equity portfolios are all in Red. Capital markets form an integral part of Economy and also a feel good factor for investors. When capital markets shall create wealth, the same shall help boost consumption, with higher spending power

 Exemption of LT Capital gains tax on stocks which are part of BSE 500 and BSE Small Cap. This will cap the fraud done on capital gain of unlisted companies. Immediate booster

EPFO Funds

 Broadening the investment horizon of EPFO from 100% in Nifty/Sensex to 10% in MidCap/Small Cap Indices as well. This will move the broader market and create wealth for investors. Indirectly boost consumption

 Scrappage Policy

 Announcing a scrappage policy for Commercial Vehicles with tonnage above 5 MT and in phases over next 3 years across all segments. This will lift sentiments of commercial vehicles. They are backbone of economy. Currently Commercial vehicles and companies financing them experiencing major slowdown and defaults

 Income tax for Individuals, partnership and LLP

 After corporate tax rate cuts, personal taxation and tax on partnership, LLP and HUF has to be rationalized, it can't be deferred. This gap is too huge. Corporate tax cuts are welcome step but to show results will take some time Personal tax cut will help faster boost consumption

 Make Pvt owned businesses, esp Sole Proprietor, HUF, Partnership, report higher profits Misuse of entertainment allowance, purchase of personal vehicles, dummy consultant on board are few "tricks" through which reported profit is depressed.

A one time offer to "bump" up profits with low "past" profitable not to be investigated. This should be offered exclusively for SP, HUF and Partnerships. Then they will show genuine profits. Few don’t show as a bump up will invite Income tax notices

Real Estate

 Huge amount of funds in Economy is struck in real estate, finished and unfinished projects

 Although recent measures have been taken in real direction including real estate fund to help last mile funding for unfinished projects. However more needs to be done to help sell huge inventory lying unsold

 It is a proven fact that any Economy cannot recover to Peak if Real Estate is in mess More sops for real estate needed. Increase the tax benefit on housing loan to 5 lacs

Real Estate creates huge jobs as well as creates demand for various products like cement, steel and many many other products. Can move Economy instantly

Single retail FDI with a Condition

 open up Multi brand retail to FDI with limit of 26% and a path to 51% over next 7 years, put safeguards that at least 15% of floor space for fresh fruits and vegetables
World over organised retail has helped clamp down on food inflation and build transparent supply chain with farmers getting them better pricing and cutting out inefficient supply chain which currently leads to almost 20% of the output getting wasted.

 This shall help farmers in a big way and also contribute to Economy


I am confident that under the Leadership of Narendra Modi Sir and Nirmala Sitharaman Madam as FM, We shall soon be on path to 8% GDP soon and this time shall be inclusive growth

 SABKA SAATH SABKA VIKAS

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Comments

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