Foreign investors will eye growth revival before committing funds to India

Whether the provisions of the Union Budget will succeed in reviving the much needed growth is not entirely clear.

The initial reaction of the equity markets to the Union Budget 2020 suggests a few disappointments. Non-abolition of long-term capital gains (LTCG) tax, confusion about the impact of dividend distribution tax (DDT) removal, taxing dividends in the hands of recipients and the alternative provided to individuals for lower rate of tax, provided they do not claim exemptions/deductions, all led to the initial knee jerk reaction.

The alternative tax system discourages investments which market participants do not seem to be comfortable with. The overhang of coronavirus outbreak on our markets also got magnified in the second-half of the session. 

Whether the provisions of