The Art of TV Show Revivals: Hits and MissesPre-Budget Expectations: Key Things to Watch Out for in the Indian Equity Market (2024The Art of TV Show Revivals: Hits and Misses

Pre-Budget Expectations: Key Things to Watch Out for in the Indian Equity Market (2024
As the Indian equity market heads toward the Union Budget for 2024-25, cautious optimism remains. Here is a distilled analysis of what are the key issues and potential areas of impact:
Taxation:
Clarity on Capital Gains: One of the significant issues concerning investment has been the highly hazy nature of long-term capital gains on equities. At present, equity investments remain free of long-term capital gains if held for over one year. The market desires some clarification on this issue so that appropriate investment decisions are taken without any kind of ambiguity and unclear guidelines in the future.
Short-Term Capital Gains Tax (STCG) Rationalization: The present rate of 15% on STCG (plus cess) creates a non-level playing field and is considered a discouragement for short-term trading activity. A possible cut in this rate may spur enhanced market liquidity and possibly higher trading volumes.
Reevaluation of dividend distribution tax: The structure of DDT as it is now signifies an added dimension of tax on the investors. A revision or possible removal of DDT has the potential to make some good revisions in the overall dividend yield for the shareholders to make the equities another attractive investment proposition.
Policy Measures:
Infrastructure Spending Stimulus: The improvement in infrastructure spending by the government has the potential of arousing economic growth that fundamentally benefits all the companies in related sectors and builds a more robust business environment.
Retail Investor Initiatives: Initiatives that promote financial literacy and simplify the investment process could attract more retail investors to equity markets. That, in turn, will help broaden the investor base and contribute to market stability.
There could be sector-specific incentives, targeted tax breaks, or even subsidies to the sectors perceived to have a high growth potential —critical for creating an impetus for investments and expediting development along those paths. Of particular interest would be priorities identified for national development.
Market Response:
The Union Budget may influence market sentiment to some extent in the near term. Still, the long-term direction of the equity market would get even more outreach from bottoms-up company fundamentals concerning the broader intensity of changes in the thread of the revitalized cycle.
Investor Considerations:
Investors, especially those looking at the long term, should emphasize the company fundamentals and have a clear view of the macroeconomic setup in which they are operating. The announcements through the budget must be seen as yet another point in the primary frame of an informed investment strategy.