To make sense of the Union Budget, we bring you some expert insights.
Ashutosh Bishnoi, MD & CEO, Mahindra Mutual Fund
There are three things, which augur well for the MF industry.
One, the government has proposed to make PAN and Aadhaar interchangeable. While PAN has a concentrated existence, Aadhaar has a widespread presence with 120 crore Indians. Therefore, this move will certainly ease the KYC process and can be a huge boost for MF penetration.
Second, the government has said that ETFs that track CPSE stocks are likely to get tax benefits like ELSS. Since the government has a huge disinvestment target, it would certainly help the industry grow.
Third, the government has asked SEBI to consider raising the minimum public shareholding in the listed companies to 35% from 25%. Consequently, this will increase the capacity of market to get capital from more participants. And this will allow MFs more room to accommodate flows from equity funds, while not being worried about driving the stocks to an overvalue zone.
Radhika Gupta, CEO, Edelweiss Mutual Fund
For this government, disinvestment is a stated priority. Hence, extending tax incentives to retail investors in CPSEs oriented ETFs will provide a big push to this category, hopefully for both equity and debt ETFs.
Incentivising PSBs to buy assets from NBFCs is positive for debt mutual funds and will ease the current credit environment. The government has also emphasized the need to deepen the corporate bond market and encourage retail participation in debt, which has been limited so far.
Ashwani Bhatia, MD & CEO, SBI Mutual Fund
From the market’s perspective, the government has announced a policy decision to do sovereign borrowings in the dollar market. This is likely to reduce the supply of bonds in the domestic market, a positive for bond market.
Further, providing one-time credit enhancement up to 10% for PSU bank purchases of highly rated asset pools of NBFCs and HFCs along with the RBI decision to provide funding against excess SLR to banks should reduce some of the liquidity pressures faced by these sectors.
These initiatives will revive growth in an inclusive and sustainable manner, making it an opportune time to invest in an economy like ours.
Suresh Sadgopan, Founder, Ladder7 Financial Advisories
I would not say that I am unhappy with the budget, since I was not expecting anything huge for personal finance. However, the proposal to increase surcharge on individuals having taxable income more than Rs.2 crore is a retrograde step. Taxing the rich is not a progressive idea.
Nikhil Kamath, Co-Founder & Chief Investment Officer, Zerodha.
Union Budget 2019 was largely a non-event, especially from a financial markets perspective. The reforms we expected on STT did not come through. STT continues to remain the largest deterrent in price discovery, jobbers and short term day traders make the markets deeper and significantly reduce impact costs.
Personal income tax largely remained unchanged, an increase in the surcharge for those having an income of above Rs. 5 crore is par for the course.
