Do you thing that there were any major positives in the Union Budget for the capital markets or were there only negatives?

If you leave short term sentiments aside, there were some structural positives in the Union budget for capital markets. First was the boost for consumption. One of the underlying themes of the Union Budget was whether it will give a boost to consumption. If you look at the reaction of the consumption stocks, they have surely given a thumbs-up. Budget 2020 has proposed a dual tax regime where taxpayers have the choice to opt for a lower tax regime by forgoing all exemptions. Market watchers feel that this will largely benefit persons earning less than Rs.15 lakhs per annum. The budget estimates that this group has a marginal propensity to consume of 0.70, which could result in a consumption impact of Rs.1.33 trillion. If that does happen, it could be a big thrust for the consumption story in Indian markets.

There were some infrastructure friendly stories too in the Union budget. While LTCG may have disappointed, the budget has given weightage to the infra story. The budget has reiterated the Rs.103 trillion commitments to creating world class infrastructure in India. It has also laid out a massive plan for 100 additional airports, an arterial road network and privatization of stations and one large port. In addition, the budget has also committed to the much needed post-harvest infrastructure as well as reiterating its commitment to doubling farm incomes by 2022. There seems to be too much ado about LTCG tax and DDT. At a more structural level, this budget does provide the much needed boost to equity markets!