Budget vs Stock Market

Honorable Finance Minister Nirmala Sitharaman presented Union Budget 2020-21 in the Lok Sabha. We must know how budget can impact  on our investment and savings. So ISFM – Best Stock Market School is providing you brief details how you should change your investment strategy as per budget announcement so that you can get maximum return on investment.

ISFM

Click below to download Budget 2020 full report.

Budget Highlights (Key Features)

Here’s a list of key budgetary allocations

  •  Agriculture allocation 38 lakh crore
  •  Rural development allocation 23 lakh crore
  •  Agriculture and rural allocation 83 lakh crore
  •  Agriculture credit target 15 lakh crore
  •  Education allocation at 99,300 crore
  •  Healthcare allocation at 69,000 crore
  •  Transport infra allocation at 7 lakh crore

Financial Sector Major Highlights : –

  • Deposit Insurance Coverage to increase from 1 lakh to 5Lakh per depositor.
  • Eligibility limit for NBFCs for debt recovery under SARFAESI Act proposed to be reduced to asset size of `100 crore or loan size of 50 Lakh.
  • Proposal to sell balance holding of government in IDBI Bank.
  • LIC stake sale would be through IPO very soon.
  • Separation of NPS Trust for government employees from PFRDAI.
  • Specified categories of government securities would be opened for non resident investors
  • FPI Limit for corporate bonds to be increased to 15 per cent.
  • New debt ETF proposed mainly for government securities

Tax proposals : –

Individual Tax Relief

Income Bracket (`

lakh)

 

 

 

Below 5

 

 

 

5-7.5

 

 

 

7.5-10

 

 

 

10-12.5

 

 

 

12.5-15

 

 

 

Above 15

Tax Rate (per

cent)

 

Exempt

 

10

 

15

 

20

 

25

 

30

  • Concessional corporate tax rate of 15 per cent to new domestic companies in manufacturing and power sector.
  • Tax concession for sovereign wealth fund of foreign governments and other foreign investments.
  • Tax benefits to Start-ups by way of deduction of 100 per cent of their  profits    are  enhanced  by  increasing  turnover  limit  and period of eligibility.
  • Concessional tax rate for cooperatives proposed. Turnover threshold for audit of MSMEs increased.
  • Extension of  time  limits  pertaining  to  the  tax  benefits  for affordable housing.
  • Issuance of Unique Registration Number to all charity institutions for easy tax compliance.
  • Health cess to be imposed on imports of medical equipment
  • given these are made significantly in India
  •  Dividend Distribution Tax removed and classical system of dividend taxation adopted.

Announcements : –

  • The announcement of a forthcoming policy to allow the private sector to build data center parks.

Impact on Stock Market : –

  • IT firms, including TCS, Infosys, Wipro, HCL Technologies, Tech Mahindra, along with mid-sized firms like LTI, Mindtree, Persistent, and Hexaware. Adani Enterprises also stands to benefit from this development.
  • Bank deposit insurance cover to Rs 5 lakh from the current Rs 1 lakh, to protect depositors in the event of a lender’s collapse.

Impact on Stock Market : – : –

  • Small bank like PMC and other will get benefited under this schemes
  • Announcement : – 

  • LIC Listing Via An IPO

Impact on Stock Market : –

  • It is negative for pvt. Sectors insurance player because of tough Competition so coming time will not easy for ICICI Pru, Hdfc  life etc.
  • Announcement : – 100 New Airports & 5 New Smart Cities + 10,000-Km Gas Grid

  • Impact on Stock Market : –

Impact : – Infra player like IRB infra,L&T, GMR, NCC and Cements Sector  Companies like Ultra Tech, ACC and Ambuja Cements will  be beneficiaries from this.

   Announcement :- Expansion of Gas grid

  • Impact on Stock Market : – Gas grid expansion is positive for IGL, MGL, Gujrat Gas etc.

    Announcement:- Agriculture and fisheries Expansion

Impact on Stock Market : –  Government’s proposal to expand fisheries and create 500 fish farmer producer organizations saw gains in Avanti Feeds, Apex Frozen Foods and Waterbase.

Announcement:- Plan to provide piped water across Indian households by 2024

Impact on Stock Market : – 3.6 trillion rupees in funding — means Jain Irrigation Systems Ltd., KSB Ltd.,    Kirloskar Brothers Ltd., JK Agri, Genetics Ltd., PI Industries Ltd. could benefit.

Announcement:- Delay in National Logistic Policy.

Impact on Stock Market: –  Delay in National Logistic Policy which is awaiting from long time may be negative to Bluedart, Gati, Mahindera Logistic and others logistic players.

Announcement:- Zero Budget Farming Policy.

Impact on Stock Market: – : – RCFL, NFL, Mangalore Chem, Chamble etc. upcoming time will be very difficult to stay away to buying such shares.

 

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