HomeEconomy NewsUnion Budget 2020 lacked 'immediate booster dose', says Tata Steel's Koushik Chatterjee

Union Budget 2020 lacked 'immediate booster dose', says Tata Steel's Koushik Chatterjee

The 2020 Union budget presented by finance minister Nirmala Sitharaman has failed to provide a short-term boost that the markets were keen on, Koushik Chatterjee, CFO and executive director at Tata Steel, told CNBC-TV18 in an interview.

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By Surabhi Upadhyay   | Anuj Singhal  February 1, 2020, 3:37:43 PM IST (Updated)

Union Budget 2020 lacked 'immediate booster dose', says Tata Steel's Koushik Chatterjee
The 2020 Union budget presented by finance minister Nirmala Sitharaman has failed to provide a short-term boost that the markets were keen on,  Koushik Chatterjee, CFO and executive director at Tata Steel, told CNBC-TV18

in an interview.

“The market reaction is hard to interpret based on the FM’s speech. I am sure the market will recognise the fine-prints going forward. So I am not sure about the market reaction as such but fundamentally if I go only by the speech — because I have not seen the detailed papers — like in July, it is more directional and in the right direction but the economy needed some short-term boost and it is still banking on the fact, the spending on infrastructure, on the national pipeline and allocation for the piped water projects and those kind of stuff," he said.

"So all of this will take time but it will possibly have an effect a few quarters down the line. So I don’t think the immediate booster dose was there in the budget as such,” Chatterjee added.

Sitharaman announced a new income tax regime with changed tax slabs. The finance minister proposed to bring a simplified personalised income tax scheme for those who forego deductions.

"The new tax regime will be optional and the taxpayers will be given the choice to either remain in the old regime with exemptions and deductions or opt for the new reduced tax rate without those exemptions," Sitharaman said while unveiling Budget.

On the tax change, Chatterjee said that the new regime will take time to show effect. “The tax cut is towards a size of the population — the number in that tax cut bracket will be significant but whether they will spend or not is a question. I didn’t get what happens to the standard deductions if they choose the new regime because if the standard deduction is also gone then it is becoming different. So I don’t know the details but it is broadly a directional budget than a booster.

“If on a like-to-like basis, there were major tax cuts then it would have been a lot more beneficial if the whole purpose is to give the money in the hands of the people. Taking the entire deduction out and then re-slabbing of it is not necessary. In the first year people will try to figure out whether they save or not, so you don’t get them to spend so easily. These have a lag effect.”

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