Budget 2022-23: Clarity on PSB privatisation is expected, say brokerages

Some clarity on the privatisation of two public sector banks, announced in last year’s Budget, is expected. Brokerages feel it is highly unlikely that the government will infuse capital in these banks, implying that these units will have to increasingly rely on market borrowings to meet funding requirements.

The government is also expected to extend the emergency credit line guarantee scheme, which has helped the MSME sector get greater access to credit during Covid. It may also provide some tax rebate to the sector.

Brokerages expect increased tax benefits on housing loans for interest payments and principal repayment. The government may redefine the affordable housing slab to expand benefits to homebuyers to realise the goal of housing for all by 2022.

As far as the insurance sector is concerned, the Centre may increase tax exemptions to incentivise consumers to buy adequate health insurance, given the uncertainty caused by the pandemic. It may also look at a separate bucket for investment in life insurance for tax rebates under section 80 (C), according to Axis Securities.

Banks have made a case for lowering the tenure of tax-saving fixed deposits from five years to three years, in line with mutual fund products. Some clarity may emerge on the much-anticipated market debut of LIC, and also on the privatisation of a public sector general insurer.