Indian shares advanced on Friday with benchmark indices rising more than 1% for the second straight session after the government proposed to reduce the tax burden and increase tax exemption limits for the middle-class and small entrepreneurs.
The BSE Sensex was around 36,700 levels, up 1.22%, before paring some gains on profit-taking. The NSE’s Nifty was trading around 10,930, up about 1%.
Acting finance minister Piyush Goyal, who presented the budget in the absence of Arun Jaitley, who is undergoing medical treatment, said individual taxpayers up to an annual income of Rs 5 lakh will be exempted from paying tax.
Earlier, individuals having an annual income of Rs 2.5 lakh were exempted from any tax liability and people having an annual income of Rs 5 lakh were liable to pay 5% on the part of their income exceeding Rs 2.5 lakh.
As many as 22 stocks from the 30-share Sensex were trading higher led by automobile companies as January vehicle sales surpassed market expectations.
The BSE’s mid-cap and small-cap indices were also trading higher, indicating a broad-based positive move in the Indian equity markets on Friday. Nearly 1,250 stocks rose as compared with 985 stocks that were quoting lower.
Deven Choksey, managing director, KR Choskey Securities advisory and brooking firm, said that discretionary spending will increase thanks to an additional stimulus of Rs 18,500 crore. This will boost sales of fast-moving consumer goods, consumer durables and automobiles.
Besides tax exemptions, Goyal laid out a plan for assured income to farmers. The government proposed an annual outlay for the farmer income scheme of Rs 75,000 crore, Goyal said.