The budget for 2018-19 has reinforced the government’s agenda to bring reforms and improve macros. The FM maintained FY2018 fiscal deficit target of 3.5% and has set a target of 3.3% for FY2019, which is slightly higher than the earlier target of 3%. However, with improving tax compliance and GST collection, the target looks achievable. In this Budget, FM has particularly focused on strengthening agriculture and rural economy by way of MSP support and fund
allocation for various rural related infrastructure programs to boost the distressed rural economy. In the budget, FM has announced 10% long term capital gain tax on equity investments over `1lakh, which is slightly negative for market in the near term. However, in our view, equity investments still remain the most attractive asset class compared to others like fixed deposits.

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