Budget wish list by Motilal Oswal, for HBL Pls carry

Hi,

Please find pasted below write up on Budget expectations by Mr. Motilal Oswal, CMD, Motilal Oswal Financial Services Ltd.

Please feel free to use this.

Attached is the picture of Motilal Oswal

Expectations from the Union Budget for HBL

I believe the government should be in the business of governance and not in the business of running economic enterprises. Every progressive annual union budget should be a step towards this direction. Accordingly, I expect high decibel announcements relating to restructuring/divestment/privatization of state-owned enterprises and opening up of more sectors for foreign investments. As the government passes on the responsibility of running economic enterprises, I expect it to take on higher responsibilities in areas such as infrastructure development, social justice, health and education. 

Why should the government be in the business of running airlines, or for that matter, any transport service? There is a strong case for the privatization of all state-owned entities involved in the transport/logistics business, especially airlines. I expect the government to take concrete measures towards consolidation of state-owned banks and insurance sector reforms. Considering the large capital requirement and strong growth opportunity, I expect the government to increase the FDI/FII limit in the insurance and retail sectors.  

Prices of commodities such as oil, food grains and fertilizers have been regulated for too long; there is little choice but to allow a gradual shift towards market prices. While there is a need for phased reduction in government subsidies, there is also a need to target such subsidies to the really needy. Subsidies should be need-based. Why should the rich farmers benefit from subsidies ideally meant for the really needy farmers? Why should the rich belonging to backward castes/tribes be subsidized? 

Given the current state of affairs, growth must take precedence over inflation/fiscal concerns. Towards this end, I expect the process of tax rationalization to continue and will be surprised if there are no measures aimed at lowering the tax burden on taxpayers. There is a need for reduction in the securities transaction tax (STT), rationalization of stamp duties across states, and greater clarity on classification of income from sale of securities. Currently, there is confusion on what constitutes short-term capital gain and what constitutes gain from speculative business. Also, I expect the dividend distribution tax (DDT) to go, as it results in double taxation.

The government should use this golden opportunity to target double-digit growth and show the roadmap towards this direction to the nation at large. That would be its best gift to the nation. I have full confidence in the entrepreneurial spirit of the people of India to transform the Indian economy to the fastest growing economy in the world.

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