Finance Minister Nirmala Sitharaman announced measures to shore up the economy as it recovers from a recession during the Covid-19 pandemic.
Budget 2021, among other things, includes plans to set up a development finance institution, a new health scheme with an outlay of Rs 64,180 crore and a lower divestment target for FY22. Here's what market participants made of the budget.
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‘High Focus On Capex To Aid Revival'
A Balasubramanian, managing director and CEO, Aditya Birla Sun Life AMC
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As expected, a very high focus on capital expenditure towards sectors like urban infrastructure, power and health sector will boost employment and also revival capital good sectors. Boosting investment in urban public transportation system should benefit auto sector. Setting up both DFI and asset management company for bad loans should further strengthen banking system. Fiscal deficit of 6.80% is in line with the market expectation, given the high liquidity and high overseas flows. Overall, a 8/10 budget.
‘Responsible, Growth-Oriented'
Nilesh Shah, MD and CEO, Envision Capital
An aspirational, responsible and a growth-oriented budget. Several path-breaking initiatives taken which will spur the economy and ensure that India grows extremely well for the rest of the decade. Several measures for simplification of business and helping the common man. On the whole, given the circumstances, an excellent budget.
‘Several Steps Towards Ease Of Doing Business'
Prashant Khemka, founder of White Oak Capital
It's an excellent budget with several steps forward along the long road of ease of doing business. These in turn should help job creation over the coming years. Specific measures include simplifying changes to administration of direct taxes while increasing compliance, boost to privatisation of PSUs, including banks, through enabling legislative amendments and increase in FDI for insurance companies from 49% to 74%. These and similar other measures make this budget one of the best budgets, furthering our Prime Minister's goal of promoting ease of doing business in India.
‘An Infra Budget'
Vikram Kotak, co-founder and MD of Ace Lansdowne Investment Services
The budget shows that the government has finally realised that infrastructure spending will create jobs and infrastructure development will lead to efficiency. We also like moves like higher FDI in insurance and asset monetisation, moves which have not been seen in the past. Such budgets have not been seen in the last few years, which seem like an infra-budget.
‘Need To Study Resource Mobilisation'
Ravi Dharamshi, founder and managing director of Valuequest Investment Advisors
Never waste a crisis. Government has chosen infra push and capex revival over handouts in this budget and not shied away from some fiscal slippage while staying on consolidation path in long term. Commitment to monetisation of assets and strategic disinvestment is a big positive. Not much tinkering in taxation is a huge positive. However, we need to see how they are mobilising the resources and what's there in the fineprint.
Follow real-time analysis from BQ's top editors Menaka Doshi, Ira Dugal, Sajeet Manghat and Niraj Shah here.
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