By Amar Ambani
The market saw a sharp sell-off during Budget, as expectations were sky-high. The market expected an overhaul of personal income tax slabs, whereas we expected only a minor tweak, in a year that has seen flat tax revenue growth. Market participants possibly also expected more measures to revive economic growth and ignored the containment of fiscal deficit in FY21 to only 3.5%. We are quite satisfied with the budget math however. Tax receipts appear achievable, especially once some flow comes through the amnesty scheme for direct tax cases. Likewise, disinvestment proceeds will also be large with LIC IPO on the cards. On the expenditure front, 13% yoy growth budgeted for FY21 matches with our estimate. Ramp up in GST revenues is a key monitorable.
(The author is Senior President and Head of Research, Institutional Equities, YES Securities)
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