Bank stocks soar, Sensex over 485 cheering Jaitley's Budget
Public Sector Undertaking (PSU) bank stocks shot up as Finance Minister Arun Jaitley announced allocation of Rs. 10,000 crore towards recapitalization of public sector banks in Budget 2017-18.
Union Bank of India jumped the highest at 4.34 per cent, followed by Bank of Baroda (3.27 per cent) and Bank of India (2.25 per cent).
Sensex grew by 485.68 points to touch 28,141.64.
India Inc reacts positively to Budget 2017-18
Rs. 10,000 crore for Indradhanush plan
"As per the Indradhanush plan, the public sector banks will be provided with Rs. 10,000 crore in the next fiscal," the Finance Minister said while presenting Budget 2017-18, adding "additional allocation would be made if required."
Mixed response from India Inc
India Inc is unsure about the fiscal deficit target set by the government in financial year 2017-18.
Selective reduction of corporate tax rate for companies below Rs 500 million turnover has been hailed as in "intelligent" tax reform.
Better infrastructure, a key focus of the Budget, will lead to easier access to foreign funds and lower borrowing costs.
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"Fiscal deficit missed the target, laudable nonetheless"
"Fiscal deficit of 3.2% missed the target, but laudable efforts nonetheless. Markets should love the lower net borrowing figure of 3.4 trillion rupees. On tax reforms, the reduction of corporate tax for SMEs to 25% is very welcome," said Tirthankar Patnaik, India Strategist, Mizuho Bank.
Waiting for better tax relief
Only SMEs with turnover up to Rs 50 crore got some relief, tax was cut to 25 per cent from 30 per cent.
The rebate will help SMEs when GST is implemented and tax rates go up.
India Inc hopes that government revisit the demand of bigger corporate later.
No change in corporate tax a letdown
"There has been no cut in corporate tax rate for companies having sales of more than Rs 50 crore despite assurance in FY16 Budget to cut taxes to 25 per cent by FY20-FY21. Achieving this level over the balance period is challenging," Dhiraj Relli, MD & CEO, HDFC Securities.
Abolishment of FIPB to liberalize FDI
The Foreign Investment Promotion Board (FIPB) will be abolished to make way for a new framework, FM Jaitley announced during the Budget today.
This move will liberalize FDI policy framework and iron out regulatory difficulties in drawing investments.
FIPB clears proposals for foreign investment up to Rs 5000 crore.
02 Feb 2017
Vijay Shekhar: Budget 2017 will boost digital services
According to mobile e-wallet Paytm's founder Vijay Shekhar, budget measures will build a more inclusive economy and increase access to digital services.
High-speed broadband infrastructure, formation of regulatory body and framework for cyber security will help in achieving the goals of becoming a cashless econonmy.
DigiGaon model will bring digital services to remote areas, ease medical access and education.
Budget will have far reaching impact - Paytm
"A large number of initiatives have been taken to increase share of digital transactions in the economy. Removal of service charges from IRCTC bookings and incentives on usage of BHIM app will encourage customers to go cashless," Paytm founder Vijay Shekhar Sharma said.