'Export sops may remain, excise benefit may go'

Dinesh Thakkar, Chairman and Managing Director, Angel Broking talks to Rex Cano on expectations from the Union Budget 2010-11.

What are you expectations from the Union Budget from the stock markets perspective?

From the stock market perspective, I do not expect any tinkering with the securities transaction tax and the short-term and/or long-term capital gains tax rate in the Budget. However, I expect the FM to lay out a roadmap for the timely control of the fiscal deficit situation in the country. I do not expect any significant announcements pertaining to the progress of the Direct Tax Code unveiled last year nor on the implementation of GST, which will seemingly be postponed to 2011. Export sops announced in the face of the global turmoil last year could continue as the exports market has yet to rebound in a substantial and sustainable manner. Further, there could be some additional focus towards agriculture on account of the huge drought the country witnessed this monsoon season. Apart from this, I expect the focus on healthcare, education and infrastructure to continue unabated.

Do you expect any stimulus withdrawal happening in the Budget?

Considering that the Indian economy is back on a reasonable growth path, some withdrawal of the stimulus provided earlier may be withdrawn in terms of a partial rollback of the excise duty (a hike by 2%). However, considering that demand has been robust in the past under much higher excise duty rates, I do not expect this rollback to dent demand. Restoration of the service tax to 12% from the current 10% may also be on the cards.

Read the full interview on smartinvestor.in