Technical Analysis

Good start to a long journey

Motilal Oswal | Updated on July 13, 2014 Published on July 13, 2014

Despite being in power for only six weeks, the Finance Minister has delivered an encouraging growth-oriented Budget. Though there are no big bang announcements, the Budget has set a clearly defined direction for the Government, which will help revive the economy and increase the confidence of the financial markets, the corporate sector and foreign investors.

The much-awaited increase in FDI limits to 49 per cent from 26 per cent in Defence and insurance and relaxation of FDI norms in real estate will attract huge investments. The Finance Minister has also increased the individual investment limit under 80C of the Income Tax Act to ₹1.5 lakhs, which will further boost insurance ventures in India.

Tax incentives for REITs and Iinfrastructure Investment Trusts will help attract long-term finance from foreign and domestic sources for real estate and big infrastructure projects.

Housing has been given special focus in this Budget with many proposals such as allocation of ₹12,000 crore to support rural housing and affordable housing for urban poor, additional tax incentive on home loans and development of smart cities. ·Clarity on retrospective taxation and implementation of the Goods and Services Tax and the Direct Taxes Code will be a few events to watch out for.

The writer is CMD, Motilal Oswal Financial Services Ltd

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Published on July 13, 2014
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