The market has remained uncertain ahead of the details of Union Budget 2019 being present by first-time Finance Minister Nirmala Sitharaman with 26 of the bellwether scrips making up National Stock Exchange (NSE) Nifty 50 declining in early trade and 24 shares advancing. Sectoral indices of banks, auto, FMCG, auto, and realty pushed ahead while IT, media, metal, and pharma indices declined. Volatility index India VIX rose indicating the market's expectation of higher volatility through the week. Nifty was trading at 11,950 points in early trade while Bombay Stock Exchange (BSE) benchmark Sensex was at 39,950 points, both trading flat.
The budget is considered extremely important this year as the first one of Modi 2.0 and being presented amid a slowdown both domestic and global. The pressure on the government to meet some of the pre-poll promises could become evident now that Prime Minister Narendra Modi is back in power with an emphatic verdict. A budget without alluding to the promises could galvanise the divided opposition. However, the government would have to balance it against the reform aspirations of India Inc. Being the first budget after the general election, the government is expected to have some leeway for hardcore reforms, but may not have had much time to reflect on them after the interim budget. Private equity group CLSA expects Nifty to be at 12,500 by the end of 2019, the Moneycontrol website reports citing CNBC-TV18 report.
The government will strive to strike a tight balance between growth and fiscal discipline, the report quotes Adrian Mowat as saying. He expected the first budget after a general election to exhibit tight fiscal discipline because the political cost is the lowest.
According to the Lok Sabha's List of Business for the day, Finance Minister Nirmala Sitharaman will present the Union Budget and then lay on the Table the statements on medium-term fiscal policy cum fiscal policy strategy and macro-economic framework. She will then move The Finance (No.2) Bill, 2019. The Lower House is expected to be adjourned until Monday (July 8) after these proceedings.
The Cellular Operators Association of India (COAI) have sought and expect some incentives such as an option to issue tax-free bonds as well as the creation of a separate financing body to provide cheaper loans to telecom operators, a report in Mint said. The telco lobby group has also sought access to long term, low-cost debt for infrastructure projects to be provided by Infrastructure Debt Funds. It has sought abolition of customs duty on the 4G/5G related network products such as soft switches and Voice over Internet Protocol (VoIP) equipment until domestic production catches up with global standards.