Budget 2018: How Sensex moved from Budget to Budget in three years of Narendra Modi government

Budget 2018: The Finance Minister Arun Jaitley is all set to present the Union Budget 2018 on 1 February 2018. Investors are keenly awaiting for the last full year budget to be presented by Narendra Modi government before 2019 general elections. Indian equity markets have been continuously rising over the 13 months with the benchmark index Sensex rising as much as 39.69% while from the index had appreciated 23.37% since the time when Arun Jaitley presented Budget 2015-2016, the first under Narendra Modi era. Earlier on Tuesday this week, India’s stock market made new all-time highs with benchmark indices Sensex and Nifty crossing the respective psychological levels of 36,000 and 11,000 for the first time in the history of Indian capital markets.

Amid this stellar rise in the stock markets, we take a look at Sensex performances from Budget to Budget.

Budget 2015 to Budget 2016: Sensex goes from 29,220.12 to 23,154.3, down 20.76%

1. In the Union Budget 2015, Finance Minister Arun Jaitley allocated a sum of Rs 70,000 crores to the Infrastructure sector and laid a foundation of Housing for all by 2020.
2. An alternate was incorporated in order to increase avenues to invest in gold with Sovereign Gold Bond.
3. The watchdog and authority responsible overlooking the derivatives sector of Indian capital markets, Forward Markets Commission was merged with the Securities and Exchange Board of India.
4. The NBFCs (non-banking finance corporations) were made to be considered as ‘financial institutions’ under Sarfaesi Act, 2002, allowing them to fund SME (small and medium scale enterprises) and other mid-corporate businesses which were registered with the RBI and should have an asset size of Rs 500 crore.

Budget 2016 to Budget 2017: Sensex goes from 23,154.3 to 24,870.69, up 7.41%

1. In Union Budget 2016, Finance Minister Arun Jaitley allocated Rs 25,000 crore towards recapitalisation of NPA-laden PSU (public sector banks).
2. General insurance companies were allowed to list on stock exchanges.
3. Individuals or entities receiving a dividend in excess of Rs 10 lakh per annum to be taxed an additional 10%.
4. MAT (minimum alternate tax) will be applicable for startups that qualify for 100% tax exemption.
5. A 100% FDI was allowed in the marketing of food products produced and marketed in India.
6. A whopping sum of Rs 55,000 crore was allocated for roads and highways while the total allocation for road construction, including PMGSY (Pradhan Mantri Gram Sadak Yojana) stood at Rs 97,000 crore.
7. Excise duty was raised from 10 to 15% on tobacco products other than beedis.

Budget 2017 to now: Sensex goes from 24,870.69 to 36,050.44, up 44.95%

1. In the Union Budget 2017, Finance Minister Arun Jaitley slashed income tax rate to 5% from 10% for the income slab between Rs 2.5 lakh to Rs 5 lakh per year. While those earning up to Rs 5 lakh were the major beneficiaries of this move, all other taxpayers in subsequent brackets too got a benefit of Rs 12,500.
2. In Budget 2017-2018, Arun Jaitley lowered the holding period to qualify for long-term capital gains exemption in the case of immovable property for two years from three years.
3. Housing for all: Narendra Modi government laid an ambitious target to build houses for homeless people by March 2019. Under the scheme of housing for all, the government said that it will build about 1 crore houses by March 2019, raising Pradhan Mantri Awas Yojana allocation to Rs 23,000 crore from Rs 15,000 crore.
4. Power for all: The government also announced to another scheme in which it had promised to provide power for all. The government had set the deadline for electrifying all villages by 1 May 2018 and similarly, it was aiming to provide 24X7 power to all by March 2019.
5. A sum of Rs 10 lakh crore was allocated as credit to farmers, with an interest waiver of 60 days
6. Will allocate Rs. 19,000 crore for Pradhan Mantri Gram Sadak Yojana in 2017-18.
7. A total allocation of Rs. 39,61,354 crore has been made for infrastructure.
8. Railways and highways were allocated a sum of Rs 1,31,000 crore and Rs 64,000 crore respectively.
9. Shares of Railway PSE (public sector enterprise) like IRCTC will be listed on stock exchanges.
10. Finance Minister Arun Jaitley laid the foundation to for PSB recapitalization following which the mega plan of Rs 2.11 lakh crore to recapitalize the NPA-laden PSU banks which came into existence in October 2017