We expect rural economy; infrastructure and affordable housing to have key impetus in the last full budget of the current government. To take our country in next cycle of growth we believe continued efforts towards financial inclusion is of paramount importance. Till date, vast majority of Indians remain excluded from access to loans, insurance, mutual funds etc. Although, in last 2 years, we have successfully implemented intricate policies like DeMo, GST and RERA. Going forward, to continue to reap the benefits of the same, we expect government should adopt simple strategies to keep the enthusiasm high. To increase digital penetration, the government may consider tax exemption for a) customers conducting transactions digitally/electronically over a certain limit, b) vendors/merchants exceeding a certain threshold in value of digital transactions.
We also expect the TDS for NBFC interest should be raised from the current Rs 5,000 (NBFC) / Rs.10,000 – (Bank) especially as the limits were last set two decades ago in 1997.
Recently, interest rate subsidies on home loans have been provided to Middle Income Group households. Currently, households earning between Rs. 6 – 12 lakh a year can claim a 4% subsidy on home loan amounts up to Rs. 9 lakh. Similarly, households earning between Rs. 12 -18 lakh annually receive a 3% subsidy on loan amount up to Rs. 12 lakh. We expect these caps to be raised so that it is in sync with the increasing costs of real estate especially in urban areas.