Budget 2018 must ensure that a predictable tax regime comes into place and various hurdles for small businesses are done away with, says Motilal Oswal’s Raamdeo Agrawal. The Finance Minister Arun Jaitley will be cautious on taxation front in budget 2018, Raamdeo Agrawal told ET Now. Betting on India’s growth story, he said that India may clock 8 percent economic growth from 6.5 percent to 7 percent considering demonetisation impact is fading and global growth is strong currently. Sharing his market outlook, he said that it’s difficult to time the market in near term.
“We expect the government to revise its deficit target to 3.4% of GDP for FY18 (higher than the budgeted estimate of 3.2%) and to 3.2% of GDP for FY19 (higher than the target of 3% set last year). It means that the plan to meet the 3% deficit target will be postponed by one year (to 2019 -20) for the third time.
As the current government will present its last full -year union budget 2018 before the 2019 General Elections, many in the market expect a heavier dose of populism. However, we believe that the government has limited financial resources to propose any targeted scheme for the poor. We also do not expect much relief on the tax front, except some reduction in the corporate tax rate for medium -sized companies,” said a report on budget 2018 expectations from Motilal Oswal.
Sharing market outlook for calendar year 2018, the report said, “However, given the hard -achieved gains on fiscal consolidation, flexibility to go overboard on spending is limited, in our view. Consumption pick-up (especially Rural and discretionary), cyclical recovery in corporate facing banks and gradual pick-up in private capex are our key themes to play in CY18. TITAN, EMAMI, UNSP, ICICI BANK, RBL, HDFC, SHTF, PETRONET, HPCL, TATA MOTORS, M&M, L&T, JSP, BHARTI are among our top idea.”
Watch: Will Tax Slabs Be Revised In Budget 2018?
Finance Minister Arun Jaitley has tabled the Modi government’s Economic Survey 2017-18 in Lok Sabha and Rajya Sabha of Parliament on Monday. Ahead of the Union Budget 2018, India’s GDP is estimated at 7-7.5% in Economic Survey 2018. What happens in the budget 2018 is still to be seen.