Budget 2023: ‘Hope it’s strong for investors, strong for economy’

According to him, the sectors to focus on ahead of Budget 2023 include energy, healthcare and pharma, specialty chemicals, technology and manufacturing.

Edited excerpts:

1. Given the forecast of mild recession, what is your outlook for the market? What levels are you looking at for Nifty, Sensex?

We do not see the global economy at imminent risk of slipping into recession in early 2023. Financial conditions are deteriorating as supply chain and commodity price shocks dissipate. A sharp decline in inflation is helping the world economy grow, so a recession is unlikely anytime soon.

Unlike last year when we saw a bull run before a correction, we can expect equity markets to be volatile. There are exciting opportunities in the commodity and currency markets as gold and silver edge higher and natural gas near a 52-week low.

2. Is the IT sector an opportunity now or is more pain expected?

Instead of focusing on the IT sector in general, it would be good to focus on technology. Artificial intelligence has entered the mainstream thanks to “generative” algorithms that can compose or create images created by a human. The race is on to make these systems the foundation of a new, cheap computing standard, with all the money flooding into the field.

3. What are your expectations from the budget?

We look forward to a budget that empowers the retail investor and trader while equipping the economy and the capital market

streamlining of income classification Intraday cash market trading is classified as speculative income, but intraday derivative trade is classified as business income. Also non-intra-day trades of less than 1 year are classified as short term. Speculative income under short term income. This will make it easier for taxpayers to classify income and remove ambiguities.

Simplification of taxation in trade and investment Most investors struggle to understand the threshold restrictions for determining whether an asset is classified as long-term or short-term in order to determine tax liability. This is due to the fact that the holding period to be considered as a long term investment varies according to the asset class. While units of debt funds should be held for at least three years to be considered as long-term capital assets eligible for lower tax rate on profits booked, units of equity funds should be held for one year, And real estate and unlisted stocks must be held for two years.

If the tenure for classifying debt as long term can be reduced from 3 years to 2 years, it will reduce the complexity of long term classification of instruments and also encourage more retail participation in debt instruments.

Also, if the Short Term Capital Gains (STGC) tax exemption can be increased to Rs 1 lakh, it will encourage many new entrants in the stock market. STCG covered under section 111A is taxed at the rate of 15% (plus applicable surcharge and cess).

There is a need to relook at Securities Transaction Tax (STT) and Commodities Transaction Tax (CTT), which have become a burden for traders and investors. Exemption under section 88E for STT/CTT would be a welcome re-introduction as it would have a significant impact on income and result in higher volume of business and would ensure a larger collection of STT/CTT for the Government.

Industry status for SEBI-registered market intermediaries. It will help in removing undue limitations, such as, cost of funds for market intermediaries and increased capital requirements; and building global financial services businesses.

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4. It is advisable to have a diversified stock portfolio. What are the defensive areas one can look forward to in 2023?

Yes. It is always a good idea to diversify the stock portfolio. Investing in index and exchange index funds (ETFs) is always a good way to start.

Apart from equity markets, bonds (especially G-Secs) are becoming attractive with assured returns of around 7% without any risk. The coming year is expected to be a good year for the bond market, so keep an eye out for it. Considering the uncertainty looming in the markets, bonds can be a good way to diversify and reduce your risks.

6. What are the topics expected to be worked on on Dalal Street before Budget 2023?

Sectors to be focused will include energy, healthcare and pharma, specialty chemicals, technology and manufacturing.

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7. What is your suggestion to the Union Minister to make this budget market friendly?

Identify the stock market as an industry as it best reflects the economy of the country. Continue to improve taxation so that people are motivated to invest and trade. Stimulate the stock market industry with incentives for brokers and investors.