Mahesh Nayak
Global cues and foreign institutional investor (FII) flows will dictate the trend for the Indian equity market in the near future. The
Union Budget 2013/14 was a letdown for the market with a hike in tax surcharge for corporates and dividend distribution tax. There was also no major incentive to channelise household savings.
The dampener was the additional corporate surcharge doubling to 10 per cent. It will impact corporate earnings and triggered the selling on Dalal Street. The lack of clarity on Direct Tax Code (DTC) and Goods and Services Tax(GST) also disappointed the markets .
Meanwhile, the finance minister reduced securities transaction tax (
STT ) on equity futures and raised the annual income limit for investors in Rajiv Gandhi Equity Savings Scheme (RGESS), but it was not enough to buoy sentiment. The RGESS allows investment of up to Rs 50,000 and investors can claim tax deduction of between Rs 2,500 and Rs 7,500 depending on their tax slab. This is not a big benefit considering that the entire invested amount gets locked for three years.
In all, it was a disappointing Budget for the capital market. One can say it was a missed opportunity.
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