Santosh Joseph is the Founder and Managing Partner at Germinate Investor Service LLP.
Santosh Joseph, founder and managing partner of Germinate Investor Services LLP, says Budget 2022, for most part, contained no surprise twists.
“The capping of 15 percent surcharge on LTCG (long term capital gain) is a big positive for the start-up ecosystem,” Joseph said.
In an interview to Moneycontrol, he said infrastructure, affordable housing and drinking water had been a significant part of the budget for fiscal 2022-2023.
What is your rating for the Union Budget and why? Has the budget met your expectations?
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I would say good. On a scale of 10, I would give it a 7 for maintaining a non-populist approach and aiming for prudence.
Do you think it is growth-oriented? Has the government done a fine balancing act?
This is a growth-oriented budget with the government (focusing on) infrastructure spending and also nudging private players to invest in capacity creation across all industries. The government and private sector both need to fuel this growth engine of increased spending.
What are the most surprising announcements made by Finance Minister Nirmala Sitharaman in her budget speech?
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Well, most of Budget 2022 hasn’t had any unexpected or surprise twists. The capping of the 15 percent surcharge on LTCG (long term capital gain) is a big positive for the start-up ecosystem.
Have you spotted any negative announcements (with respect to equity markets, foreign institutional investors, retail investors etc) in the budget speech?
I think no negative announcements is a huge positive with respect to equity markets and investors — both FIIs and retail investors. There were fears of an LTCG increase or superrich tax, all these missing are a big relief to the markets. Personal income slabs being untouched left the individual taxpayer a little disappointed.
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After the budget, what are the sectors to bet on or sectors that one must have in one’s portfolio? And why?
Infrastructure, affordable housing and drinking water have been a significant part of this budget. All these sectors would benefit well; generally there is a steady development towards all the industries. Earlier IT (information technology) would hog most of the limelight, now we have many sectors benefiting.
Do you think this budget has put a clear roadmap for India to achieve the $ 5 trillion GDP target by 2024-25?
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We are in that direction with emphasis on growth, with many drivers at play and given a further boost. Like PLI (production-linked incentive) scheme in 14 sectors under Atma Nirbhar Bharat to create 6 million jobs, additional allocation of PLI in solar PV (photovoltaic) module manufacturing.
Promotion of fintech and digital economy, digital banking systems in 75 districts by scheduled commercial banks along with core banking services to start in post offices is huge!
Gati shakti masterplan has scope to enhance multimodal communication through seven engines, 2,000 km of rail network to be brought under (indigenous technology network) KAWACH and hHighway network to grow by 25,000 km, and Rs 2 trillion outlay for MSMEs (micro, small and medium enterprises), additional loans for 13 million MSMEs should help many small and medium enterprises.
Are you happy with the government’s divestment programme set in Budget 2022?
Actually, the government has lowered its divestment target for the current financial year by over 55 percent to Rs 78,000 crore as its big ticket privatization proposals have seen a delay, mostly relying on the successful listing of LIC (Life Insurance Corporation) to meet this year’s target. The disinvestment target for next year has been set at a rather conservative limit.
As per your reading, what are the missing factors that the government should have done in Budget 2022?
Well, we can’t expect magic out of the budget considering what we have come through the past two years consecutively of the pandemic. For many years now the individual taxpayer is awaiting a reduction in tax rates or increase in taxable slabs. LTCG reduction would be favourable for markets and also to further motivate retail savings into capital markets. Limits under section 80c increase were also eagerly anticipated, which was a bit of a let-down.
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