A realignment in capital gains tax rates maybe on the horizon during the current term of the Union government as part of a global consensus of treating it more uniformly and not as a local issue, according to Maneesh Dangi, founder of Macro Mosaic Investing and Research.
"The train is coming from the other side and will hit you someday," he said during a discussion on NDTV Profit's Budget 2024 Think Tank. "It will almost certainly hit during this term of the Modi government."
Dangi explained that a form of harmonisation across various asset classes was likely, potentially leading to a uniform long-term capital gains tax period of two years. "We might see the capital-gains tax rates aligned more closely with European standards rather than the US ones. However, political shifts, such as a potential Trump victory in the US, might delay this process by another four years," he said.
Maneesh Dangi, founder of Macro Mosaic Investing and Research
On rural development and infrastructure. Dangi said the Union government would likely to continue its strategy of lending to states, enabling them to undertake significant capital-expenditure projects. He underscored that this method was more efficient, given the states' greater capacity to spend.
India is pivoting from direct central-government expenditure to empowering state governments to address their specific needs.Maneesh Dangi
Dangi highlighted the government's substantial capex push, pointing out that this would be facilitated by the windfall from the RBI and improved tax collections. He said a significant portion of this fund would be advanced as loans to the state governments to support their infrastructure projects, particularly in Andhra Pradesh and Bihar.
Roads have improved dramatically and this focus will likely continue in the coming budgets. While areas like railways and sanitation have seen investments, these still lag in quality and capacity improvements, according to Dangi. "The development of East Asia-like infrastructure is one of the significant achievements of this government."
On potential for wealth creation in the infrastructure sector, Dangi said: "The earnings in these sectors will grow due to continued investments, but making money will be challenging if valuations remain high."
Watch the Budget Think Tank panel discussion here:
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