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Sunday, January 23, 2022

Budget 2022: Government may increase capital expenditure, emphasis will be on fiscal consolidation

Budget 2022: In the upcoming Union Budget, Finance Minister Nirmala Sitharaman can announce a roadmap for fiscal consolidation along with an increase in India’s capex cycle. Along with this, more budget can be provisioned for capital expenditure and healthcare schemes, which aims to include India in the global supply chain. These are the expectations the brokerage houses are making from the Budget 2022-23.

Housing, auto and auto ancillaries will get support

According to a report in Economic Times, Dhananjay Sinha, MD and Chief Strategist, JM Financial Securities, said, “We would like to see whether achieving a tax neutral GST would mean an increase in the tax rate and its impact on various sectors. In addition, there is a possibility of reduction in excise duty on petroleum products. The market is also expecting measures to support housing, auto and auto ancillaries, PLI related measures in various sectors.”

Work from home allowance of Rs 50,000

Vineet Bolinjkar, head of research at Ventura Securities, expects a revision in a work from home (WFH) allowance and standard deduction for the working class. “It is recommended that deduction of additional work from home allowance of Rs 50,000 is recommended for such employees. Also, the standard deduction limit under section 16 of the Income Tax Act is expected to be increased from Rs 50,000 to Rs 1 lakh.

Budget 2022: Central government may increase disinvestment target, will be responsible for LIC’s IPO

Bolingkar feels that the limit of tax benefits on interest payment and principal repayment of housing loan can be increased to Rs 50,000 from the existing limits of Rs 2 lakh and Rs 1.5 lakh, respectively.

PPF limit expected to increase

Gaurav Garg, Head of Research, Capitalvia Global Research, expects the PPF limit under 80C to increase by Rs 1.5 lakh. There was no announcement on this in the last budget. Garg said, “I am expecting some relaxation in tax and waiver or reduction in raw material GST to give impetus to the real estate sector, as this sector has made a good comeback during the last few quarters. Also, in view of the third wave of COVID-19, additional allocation is expected for the education and healthcare sector.

Sitharaman will present the fourth budget on February 1.

Budget 2022: Expected Rs 50,000 allowance for work from home, the government got this suggestion on standard deduction

Possible increase in capital expenditure

Another key expectation is an increase in the budget for capital expenditure. A provision of Rs 5.54 lakh crore was made for this in the last budget, which was 26 per cent more than Rs 4.39 lakh crore in FY21. ICICI Direct’s research head Pankaj Pandey expects it to grow 25 per cent to Rs 7 lakh crore in FY23. “This can significantly increase the government’s ability to support NIPs,” he said.

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Shehnazhttps://www.businesskhabar.com/
Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.
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