‘Post-budget Stock Picks’

The Union Budget has introduced a couple of investor-friendly options this year –

- Securities Transaction Tax

Securities Transaction Tax (STT) was anticipated by investors to be completely scrapped but STT has only been reduced to 0.1 percent from 0.125 percent. Dinesh Thakkar, CMD of Angel Broking, says, "As the STT has been lowered only for delivery-based transactions, it won't boost the volumes. However, it shows that the government recognizes the importance of the market."

- Rajiv Gandhi Equity Savings Scheme

The particulars of Rajiv Gandhi Equity Savings Scheme (RGESS) have not been disclosed yet but Pranab Mukherjee, Finance Minister, is planning to get more investors to the Indian market using this scheme. It has been proposed that RGESS will have a period of lock-in of 3 years, with 50 percent tax exemption given for new investors with an annual income of less than 10 lakh and who invest a maximum of 50,000. However, this plan has been criticized "As there is no fund manager to diversify the risk, these first-time investors may end up putting money in risky stocks," quotes Sudhir Kaushik, Co-founder of Taxspanner.com.

- What Should Investors Do?

Thakkar says, "As the budget has not impacted the market negatively, the market will now look towards global money flow, inflation, interest rate, etc, for cues." Kishore Bang, Co-founder and Director of Nirmal Bang Group, says, "All eyes will be focused on it and we hope that the” (RBI) “interest rates will be reduced." Still, putting the entire weight on RBIs’ shoulders will not help as only RBI reforms cannot save our economy.