Budget 2020: Stock market causes heavy losses to investors
On Saturday, Finance Minister Nirmala Sitharaman presented the Budget 2020, after which the stock market collapsed and investors lost Rs 4 lakh crore. The Bombay Stock Exchange’s flagship index Sensex closed at 39,735.53, down 987.96 points, or 2.43 per cent. At the same time, the National Stock Exchange’s Nifty closed at 11,643.80, after losing 318.30 points, or 2.66 percent. This is the biggest decline of a decade. The stock market was not happy with the general budget.
Let’s know five reasons, because of which this market fell drastically.
Confusion about tax slab
For the convenience of common taxpayers, the Finance Minister has announced a new income tax slab. According to this, if a taxpayer files his return according to the new slab, then he will benefit greatly. However, if the taxpayer uses exemption options like section 80C, 80D, 80G and 80E and standard deduction, then there will be no benefit in tax. According to analysts, the problems between the old and the new tax system came to light.
No declaration made on LTCG tax
Apart from this, it was also expected to abolish the Long Term Capital Gains (LTCG) tax from Budget 2020. Investors were hopeful that Nirmala Sitharaman would end it, or make some other changes to it, which would be in their interest. But no such announcement has been made, which angered investors and caused a market crash.
No area has received any special gift
According to the Economic Times news, Finance Minister Nirmala Sitharaman has not made any specific announcement in the budget for any particular area. Earlier, it was hoped that the government would encourage consumption to improve the economy. But Vinod Nair, Research Head, Geojit Financial Services, said that the government has not met expectations, due to which the market fell.
Dividend distribution tax ended
Explain that Nirmala Sitharaman announced the abolition of Dividend Distribution Tax (DDT) in the budget. This move of the government will increase the burden of Rs 25,000 crore on the government exchequer. Analysts say that this is not good news for investors. This is because the end of the dividend distribution tax will add to the income of the dividend taxpayer.
Enormous objective for disinvestment
During the financial limit, the Finance Minister likewise made a major declaration about disinvestment. Nirmala Sitharaman declared that the legislature would sell its stake in Life Corporation of India (LIC). Introductory open issue (IPO) will be brought for this. Likewise, the administration proposed to sell the staying capital of IDBI Bank through the Stock Exchange. Clarify that the administration has set a disinvestment focus of Rs 2.10 lakh crore for FY 2021. This objective is very huge.