Budget 2024: From F&O to GST optimisation — five things that Indian stock market seeks from FM Nirmala Sitharaman

Budget 2024: As the Union Finance Minister Nirmala Sitharaman is all set to present the Union Budget for the financial year 2024-25, the Indian stock market also has some expectations from the Modi 3.0 Government. According to the stock market experts, they expect the Continuation of the Central Government's policies. While most market experts believe the central government should remove the Long Term Capital Gain Tax or LTCG Tax, they want to keep the capital gain tax structure the same if their age-old demand is met on 23rd July 2024.

Top 5 budget expectations of the Indian stock market

Here we list out the top 5 things that the Indian stock market is expecting from Nirmala Sitharaman in Budget 2024:

1] No change in capital gain tax: "It is an age-old demand of the Indian stock market to remove the LTCG Tax. However, there is a buzz in the market that the central government may announce some changes in the capital gain tax structure, which means there will be a greater tax burden on the investors. This does not favour the Indian equity market, and hence, we request the government to keep the capital gain tax structure unchanged. And if they want to change the capital gain tax structure, they should remove the LTCG tax only," said Avinash Gorakshkar, Head of Research at Profitmart Securities.

“There is a lot of news flow around changes in the derivatives segment, which may have a short-term negative impact on the market. So, we are expecting a status quo on taxation in the Future & Option (F&O) segment,” said Gorakshkar.

2] Continuation of the policies: "The Modi 3.0 is a coalition government; hence, there is a buzz about the populist majors taking centre stage in this budget. However, the market wants to continue with the growth-oriented blueprint. So, the government needs to remain focused on infrastructure, railway, power, and energy, where the Modi Government has done a lot in the last ten years," said Gorakshkar.

3] Growth-oriented policies: "We expect significant reform measures aimed at fostering sustainable growth and enhancing social welfare, with strategic allocations toward the agricultural sector, infrastructure, public healthcare, railways, power/renewable energy, real estate, defence, logistics, and tourism. Besides, some revisions in the income tax slabs or an increase in the standard deduction under the new tax regime to increase disposable incomes are expected. Further, measures to balance the fiscal deficit while ensuring sufficient funding for development projects are expected," said Sugandha Sachdeva, Founder of SS WealthStreet.

4] Divestment of PSUs: "We expect an aggressive approach by the Modi Government in its third term. Investors anticipate budget 2024's more aggressive and open divestiture plans. A successful divestment can increase corporate governance and release value," said Gorakshkar.

5] GST optimisation: "For the Indian economy, the Goods and Services Tax (GST) regime has been revolutionary. But there are requests for optimisation, especially about lowering the GST rates on necessities like cars and appliances. Reducing the GST rates for certain items may increase consumer demand, enhance sales, and assist associated sectors. As corporates significantly contribute to the Indian stock market's growth, we are expecting some GST optimisation-related announcements from FM Nirmala Sitharaman," said Saurabh Jain, Vice President of Research at SMC Global Securities.

Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.