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Inflationary Budget 2018-19: An Overview

Nirmal Bang | 02 Feb, 2018  | Follow Author | Add to my Favourites 
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An Overview

- Finance Minister has presented budget for FY18-19, which is more of inflationary in nature.

- Fiscal deficit is likely to increase to 3.5% in FY18E vs. the government's initial target of 3.2 %of GDP. Even for FY18  19 fiscal deficit target has been revised to 3.3% vs earlier target of 3%. Higher Fiscal deficit will lead to higher borrowings by the government. FM has raised Custom duty on input related to Consumer goods. Government has also decided to keep MSP for the all unannounced crops of kharif at least at 1.5x of their production cost. This all are indicators of increasing inflation going ahead.

- Government in this budget has focused more on rural economy and announces various measures to improve growth over there

- Well talked long term capital gain tax has been re-introduced in the budget on both domestic (including mutual funds) and foreign institutional investors @10% with immediate effect. Another source of fund which the government has targeted this time is the increase in custom duty where in duty are increased substantially to encourage local production. Governemnt has prepared the market well in advance for this populist budget and market had already prempted the nature of the budget.

- Budget is becoming more of a statement of account and policy statement and major changes (including GST rates) are happening out of the budget. We feel post this event market will again start focusing on earnings and global markets.

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Founded in 1986 by Nirmal Bang, the Nirmal Bang is recognized as one of the largest retail broking houses in India, providing an array of financial products and services. Their retail and institutional clients have access to products such as equities, derivatives, commodities, currency derivatives, mutual funds, IPOs, insurance, depository services and PMS. The Group is headed by Mr. Dilip Bang and Mr. Kishore Bang.

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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