Seasoned Investors, Traders & Stock Market Welcomes the Budget

It is not only the business leaders from accomplished business houses and startups who came vouching for the bill. Infact, the rally on the stock market today is a testimony to the welcoming of the budget. We spoke with a seasoned investor and some business leaders in the stock market world too. Here are their reactions

M Chandra Sekaran, Seasoned Investor

M Chandrasekhar from Chennai is a seasoned investor who understands the stock markets in and out. When we approached him for a comment, all he had to say was, “Stock market seems to be happy as there is no hike in corporate tax in the much feared form of COVID cess.

Further, investors were relieved as Finance Minister left the short term and long term capital gains tax untouched. Even as the finer details on bad debt reconstruction were awaited, bank stocks rose the most on the budget day. The major indices are marching towards their all time highs and investors are hoping for the best

Mr. Mohit Ralhan, Managing Partner and Chief Investment Officer, TIW Private Equity

This is an extremely balanced budget given that the economy is just emerging out from a contraction and the risk of pandemic is still around. The government has relied on increasing government spending to boost the economy and therefore the fiscal deficit for FY22 has been pegged at 6.8% of GDP.

More than doubling of the allocation to Healthcare expenditure was quite necessary to better fight the pandemic and we also saw a 34% increase in capital expenditure with a sharp focus on rail and road to boost the industrial output.

There are also quite a few measures that will have a long-term positive impact on the Indian economy including formation of asset reconstruction company, measures to combat air pollution, divestment of public sector banks, increase in FDI limit to 74% in Insurance, promotion of digital payments and increasing tax transparency through digitization. Overall, the closely monitored budget rightly targets the areas to accelerate economic recovery without increasing any undue tax burden.

Mr. Raghvendra Nath, Managing Director, Ladderup Wealth Management

“The Union Budget presented by the honorable finance minister was a novel one highlighting the essential problems faced by the economy and addressing them on the right lines. The country required a much-needed boost in the infra space which was duly provided for in this budget. The significant increase in allocation for the same is a reflection of the intent of the government and benefits of which should trickle down the economy effectively. The easing of compliance norms should help both businesses and individuals function smoothly and reduce the compliance burden. The privatization of two public sector banks and the stake sale of LIC should help the government meet the disinvestment target and reduce the fiscal constraints. The status quo on direct taxes should alleviate the tax burden on the HNIs. Overall it should pave the way for India’s growth going forward”.

Mr. Waqar Naqvi, CEO of Taurus Mutual Fund

While one needs to wait for the fine print yet one can say  that broadly the markets will be happy with the budget given the overall direction of the budget indicated by government’s decision to:

1. Decision to privatize two PSU Banks and one Insurance Co.
2. Create an ARC and AMC to manage stressed assets – this can be build upon in the years to come into a bigger entity.
3. No increase in direct and indirect taxes.
4. Allowing FDI upto 74% in Insurance Companies.

Arafat Saiyed, Sr. Research Analyst, Reliance Securities

With the strong push on Capex, we expect ordering activities to improve for Roads, Power T&D, Railway electrification front. Looking ahead, we expect further up-tick in ordering activities led by schemes i.e. National Infrastructure Pipeline, Bharatmala etc. These schemes are expected to result in better cash flows and new investments in Infrastructure.

Nearly 100 business leaders and thought leaders have responded to our queries on the budget positively. Now, implementation of these measures is the question that prevails in everyone’s mind. Let us hope implementation happens efficiently and all stakeholders get benefited. In the meantime, keep watching this space for more exciting updates.