Interim Budget 2019 a road map for planning long-term investments

Capital Gain Exemption under 54 EA of Rs 2 crore (one time) - for buying the second house should boost demand for housing sector and housing finance companies.

Finance Minister Piyush Goyal pledged Rs 75,000 crore to support farm income, and reduced the tax burden for middle-class voters in his Interim Budget 2019 on Friday. The moves may be aimed at finding favour with the electorate in the Narendra Modi government's last Budget before the Lok Sabha elections 2019. The Budget proposals also reduced the burden for the middle class, by raising the income tax threshold from Rs 250,000 to Rs 500,000. Many of these measures aim to put money into pockets quickly. 

Rural India

The government announced a Rs 1,35,000-crore stimulus for Rural India, where a Rs 75,000-crore package has been allocated for PM Kisan Samman Nidhi. Under the scheme, 120 million farmer families will get Rs 6,000 a year. This apart, a Rs 60,000-crore fund has been set aside for Mahatma Gandhi National Rural Employment Guarantee Scheme. In addition, the FM also announced interest rate subvention and incentive schemes for farmers with regard to loan repayment. As a result of the slew of schemes, FMCG and consumer durables and farm input providers will benefit. 

Govt e-Marketplace Platform

Goyal announced that Govt e-Marketplace Platform had transacted Rs 17,500 crore of transactions and all PSUs and government organisations would now be required to buy from GeM. This way, government saves between 25 and 38 per cent on purchase of goods. Infibeam stands to benefit as it has provided the platform to the government. The company earns 10 basis points per transaction in revenue, on every transaction done on the GeM platform. Estimated volume on GeM could be Rs 700,000 - 800,000 lakh crore per annum. 

Digital villages

The proposal to create 100,000 new digital villages in the next five years will boost companies such as Sterlite Technologies and Reliance Jio.

Vision 2030 

It's a fantastic road map for investors and corporate entities for planning their investments. A 10-year vision statement is a first in India for the government. It's a very powerful drive to lift India to $10-trillion economy. 

Capital gains tax exemption

An exemption in capital gains exemption under 54 EA of Rs 2 crore (one time) - for buying a second house should boost demand for the housing sector and housing finance companies. 

Market outlook

2019 is the election year and markets are going sideways on the lack of clarity and confidence. Study shows broader markets, Sensex and all sectors in the Pre-election months (Jan - May) and post-election period (June - December) have delivered stellar returns regardless of the outcome of general elections.  

Sectorally, auto & auto ancillary, banking & financial Services, capital Goods & information technology (IT) have all delivered between 25 per cent and 35 per cent returns in the said periods. 

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The author is managing director of KRChoksey Investment Managers

(as told to Swati Verma)