Budget 2023: ‘Expect it to be empowering for investors, equipping for economy’

According to him, the sectors to watch ahead of Budget 2023 are energy, healthcare and pharma, specialty chemicals, technology and manufacturing.

Edited quotes:

1. Given the predictions of a mild recession, what is your outlook for the market? Any level you are looking at, for Nifty, Sensex?

We don’t see the global economy at imminent risk of slipping into recession in early 2023. Financial conditions drag on supply chain disruptions and commodity price shocks. A sharp drop in inflation is helping the world economy grow, so a recession is unlikely anytime soon.

Unlike last year when we saw a bull run before a correction, we can expect equity markets to be volatile. There are exciting opportunities in the Commodity and Currency Markets with Gold & Silver shining brighter and Natural Gas at 52 week lows.

2. Is the IT sector an opportunity now or is there more pain to look forward to?

Instead of focusing on IT Sector as a whole, it is better to focus on technology. Artificial intelligence has entered the mainstream thanks to “generative” algorithms that can write or create images that look like they were created by a human. The race is to make these systems the foundation of a new, affordable computing standard with all the money flooding the sector.

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3. What are your expectations from the Budget?

We anticipate a Budget that empowers the Retail Investor & Trader while supporting the economy and capital markets

Streamlining of Income Classification – Intraday cash market trading is classified as speculative income, but intraday derivative trade is classified as business income. Apart from this non-intra-day trades of less than 1 year are classified as Short term. Speculative Income under Short term Income. This will simplify the classification of income for taxpayers and ease the system of ambiguity.

Simplification of Taxation of Trading & Investments – Most investors struggle to understand the threshold restrictions for determining whether an asset is classified as long-term or short-term to determine tax liability. This is due to the fact that the holding period for calling it a long-term investment varies by asset class. While units of debt funds must be held for a minimum of three years to be considered a long-term capital asset eligible for a reduced tax rate on booked income, equity fund units must be held for one year, and real estate and unlisted stocks. must be held within two years.

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If the tenure can be reduced from 3 years to 2 years to classify Debt as long term, it will reduce the complexity of long-term classification of instruments and also encourage more retail participation in Debt Instruments.

Also, if the Short Term Capital Gains(STGC) tax exemption can be extended to Rs.1 Lakh, it will encourage many new entrants in the Stock Market. STCG covered under section 111A is taxed @ 15% (plus duty and cess as applicable).

The Securities Transaction Tax (STT) and Commodities Transaction Tax (CTT) that have become a burden on traders and investors should be reviewed. The rebate under Section 88E for STT/CTT, is a welcome reintroduction as it will have a significant impact on revenue and will result in higher volume trading and ensure greater collection of STT/CTT for the government.

Industry status for SEBI-registered market intermediaries. This will help remove unreasonable limitations, such as, the cost of funding and increased capital requirements for market intermediaries; and the creation of global financial services businesses.

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4. It is advisable to have a diversified stock portfolio. What are the defensive sector(s) to watch in 2023?

YES. It is always a good idea to diversify stock portfolios. Investing in Index and Exchange Index Funds (ETFs) is always a good way to start.

Apart from equity markets, BONDs (especially G-Sec) have become attractive with guaranteed returns of around 7% risk-free. The bond market is expected to have a good year in the coming year, so keep an eye on it. Given the uncertainty surrounding the markets, Bonds can be a great way to diversify and reduce your risks.

6. What are the themes expected to be used in Dalal Street before Budget 2023?

Sectors to watch include Energy, Healthcare & Pharma, Specialty Chemicals, Technology and Manufacturing.

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7. What is your suggestion to the union minister to make this Budget market friendly?

Identify the Stock Market as an industry because it best reflects the country’s economy. Continue Taxation reforms so that people are encouraged to Invest & trade. Encourage the Stock Market industry with incentives for brokers as well as for Investors.

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