Why you should care about Union Budget 2022?

Whether you are an individual or a business, the finances of your country impact yours. Here’s how:

1. Your balance sheet is linked to your country’s!

The budget is basically a statement of the country’s finances i.e. the income sources and expenditure. It contains key metrics (GDP growth, fiscal deficit, current account deficit etc.) that are watched not only by people inside the country but also the whole world.

We live in an interconnected world, and the view that global investors and ratings agencies hold of India’s economy impact incoming investment flows, economic growth and our currency.

2. Your stock market investments react to the budget.

No matter what the budget contains, the stock markets respond to it. You may have heard of the markets giving the budget a ‘thumbs up’. It will be interesting to see what the response is, given the downward trajectory of the stock market largely due to global factors.

Even no apparent reaction from the markets is seen as a reaction – it’s assumed to be an affirmation of investors’ belief in the government’s continuing policies and programs.

3. Tax changes may be putting more money into your hands!

Both because of COVID or even otherwise (sometimes to fuel growth), governments can decide to release incentives by way of direct or indirect tax cuts or adjustment to tax slabs, capital gains tax and others. There is also speculation that this will be populist budget because of the upcoming elections.

These have a bearing on your tax returns and wealth. Sometimes rates of saving instruments and schemes managed by the government are also tweaked, impacting your finances and decisions.

(For example: There’s been speculation that the 2022 budget may contain additional tax benefits for National Pension Scheme or NPS investors.)

4. Special announcements that might surprise you!

The budget speech of the Finance Minister has also been used as the opportunity to announce some special measures on the economy as well as policy measures or guidance.

(For example: we’re all wondering if we might hear about the cryptocurrency bill that’s been making headlines in the upcoming budget. There may be grants for small businesses or individuals impacted by the COVID-19 crisis, or some incentives for the pharma industry etc. To raise money for incentives and programs, the government may announce divestment or other measures.)

5. What does the future entail?

COVID has been a major challenge to the economy, jobs, and incomes. It is pertinent to watch the impact of the full year of COVID. The budget also tells you what the directional thinking of our government is, for the future.