Not a ‘super budget’, says Atul Kumar, Head-Equity Funds, Quantum AMC
“There were some high expectation from budget it has not lived up to that. On the positive side, there have been measures to increase infra funding as well as implementation of projects. Corporate tax rates are proposed to be reduced by 5%, and many of the exemptions will be taken away. This is positive as it improves tax compliance and also helps corporate earnings.
There has been social and rural spending. Measures have been announced on tackling of domestic as well as offshore black money in-line with promises made by the government earlier. However, a fiscal deficit target has been postponed and government maintains to introduce GST by start of April 2016. GAAR has been deferred as was expected. There have also been benefits announced which will help SMEs. It looks like a budget is in right direction, though it wasn’t a “dream budget” or a “super budget” as was made out by markets or media. “
“The fiscal deficit target has been modified to 3.9% in 2015-16, 3.5% in 2016-17 and 3% in 2017-18. The previous target was 3.6% of GDP and 3% levels This is due to14th Finance commission recommendations. 62% of the central revenue would now go to states from 52% level. The revenue deficit is targeted at 2.8% of deficit for the current financial year. Finance minister has accepted the monetary policy framework of making RBI responsible for maintaining CPI inflation below 6% levels. The finance minister also expect CPI inflation to be around 5% in the current financial year. Given the high fiscal deficit and achieving the CPI target of 5%, we expect 50 to 75 basis points of cut in interest rates in the next financial year.''
Disappointing budget for MF industry, says Ganti N Murthy, Head -- Fixed Income, IDBI Asset Management Co Ltd
Expectations from the budget were sky high and the result was a mildly disappointing. After a pre-budget economic survey suggesting the need for big bang reforms for ensuring high growth, the budget did not contain any major reform measures.
The budget is high on intent and hope of higher tax collections. The MF industry was expecting the notification of the retirement benefit funds under Section 80C, but that was not announced. Overall we can give the budget a rating of 6 out 10.
Monetising gold is a good use of the asset: Shachindra Nath, Group CEO Religare Enterprises Ltd
“Given the constraints of the fiscal space, it is a well balanced and well-thought through budget that will unleash India’s growth potential in the coming years and make it a preferred investment destination for global investors. Rationalisation of corporate taxes, deferment of GAAR rules and ease of doing business will in general improve confidence. At the same time, the budget has introduced a comprehensive social security system for the country’s poor that will provide them a much needed security net. As far as Religare and the overall financial services too are concerned, there are a number of positive takeaways from this budget, including bringing NBFC operations under the ambit of SARFAESI Act that will make our NPA recovery more robust. Given our sizeable assets under AIF and bouquet of India focussed funds, the proposal to allow foreign investments in AIF will help us attract more funds. The budget has also taken the commendable step of significantly raising the limit for health insurance and that will encourage individuals to buy health insurance cover. The move to monetise gold will put this asset to more productive use.”
RBI will go slow on rate cuts now, says Arvind Sethi, MD & CEO, TATA Asset Management
“The budget was disappointing because it assumes a questionable growth rate, relies too heavily on divestment to meet fiscal targets, does not address the revenue deficit issue head on and leaves the good things for the future!! From the rate cut point of view the budget is a little disappointing because they have not dealt with some of the fundamental issues of revenue deficit and still relying too much on divestments as the means of meeting the fiscal deficit. Inflation may continue to come down, but RBI may continue to go slow on rate cuts. We continue to expect rate cut of further 50 bps in 2015.”
Much more could be done on infrastructure spending: Nitin Jain, CEO – Retail Capital Markets & Global Asset Mgt – Edelweiss
“I would rate the budget a 7 and a half on a scale of 10! Though it is a fairly well-balanced budget, the market expectations were really sky-rocketing before this day. So I would not be surprised to see a market correction of may be 5-6%. It is not close to the ‘Visionary document’ that people have been talking about. Overall, I would still say it is a well-balanced one. The levy on corporate taxation, rationalisation of wealth tax, incentives by more expenditure towards infrastructure are all positives. But nowhere close to what markets were expecting.
For NBFCs the SARFAESI law is a huge positive, for some infrastructure companies, especially in roads, the EPC companies should do very well. But that is where I would stop. There were much more expectations on infrastructure spending and more than all of this, the expectation on announcements for banks as banks are in massive need for recapitalisation and the budget fell short on those expectations but may be those may follow soon.”