Indian Union budget 2019 is just 2 days away and will be presented by honorable finance minister Nirmala Sitharaman. What all the points you should look into coming budget announcements.
- First thing first – Corporate Tax: I am advocating lower tax for Indian entrepreneurs. Our ex-finance minister promised to cut corporate tax in phased manner. If we see any development in this long awaited issue, will be welcomed by the market in a big bang. If we can change our view from short term to longer view (sacrificing some tax in current financial year and inviting more and more companies to set-up their businesses in low tax regime). If initiated with lower corporate tax rate in coming budget will yield reward in years to come. Our dream of 10% GDP growth will be reality.
- Infrastructure Expenditure:
- Roads and bridges: 5 years allocation should not be less than 6 Lac crores and more advisable is 8 Lac crores. Or what our honorable Road and Transport Minister can raise fund by issuing Infrastructure bonds to push the infrastructural activities. I attended one meeting of NSE, where he promised to come out with 7.5 to 8% Infrastructure Bond. He claimed that ministry will be able to pay interest from the collection of road tax and toll charged at different highways. This may be win-win condition. Investors, Ministry and Country will be at benefit. Why it is required? Not only to push the growth but create employment. Country cant be happy until and unless larger employments can be created.
Linking rivers is need of the time.
- New modes of transport like ferry, vessels, ships, Cargos to transportation not only passengers but heavy goods etc. This can be an opportunity as 3/4th boundaries of India is surrounded by ocean. For what we waiting for?
100 Smart cities – affordable housing, roof top solar panels, transportation, energy supply, solid waste management, smart roads and smart water. What I suggest is go for metro train in all 100 cities project in one go this year and see the change. As Japan has funded project of Delhi Metro may not hesitate in other cities at very low interest rates. Around 5151 projects are been selected under the theme of Smart Cities. Government must allocate more than 10k crores.
- Many economists are advocating to push the growth let fiscal deficit can rise from 3.4 to 3.8% even. I am not in this favor. If we need to attract foreign money then fiscal discipline is very important. In no case it should cross the border of 3.5%. How to fund increased expenditure. This year Government can initiate sale of 5G spectrum. 6 Lac crores add on. RBI may transfer 3 Lac crores dividend. Government must show the guts to sell PSUs in tune of RS. 15 Lac crores. India must push the growth by maintaining fiscal discipline. Government can look for many more avenues of revenues.
- There are many large companies having large surpluses. Government can initiate 40:60 partnerships with them. Government can provide land for hospitals, institutes; manufacturing units and private players can bring in money and expertise. Private players must have 60% share. Apollo Hospital (Inderprastha Hospital) at Jasola, New Delhi is an example of great success. 60% of private players or 70% to private players is the keyword. Maruti, TCS, WIPRO, INFOSYS, COLGATE, MRF etc. There is long list with huge funds. That will be proved as a win-win proposal. Time will tell if and only if point # 5 can be played, Indian growth rate will be in double digit in times to come.
In last all the good wishes and best of luck to Finance Minister for her first budget. I have complete faith in the team of Madam. Finger cross, July 5th will be trigger point. Nifty 11995 is to watch.