Subsidy reforms and the implementation of a 6 percent goods and service tax (GST) are among the highlights, deemed necessary for the country`s fiscal consolidation efforts. But analysts and citizens alike are worried about a resulting spike in inflation.
Modi also highlighted that his government has taken important steps to improve indigenous defence technology. He said, "In the Budget we have taken several steps for defence offsets. We dream to make India strong to export defence equipment to the world."
Angel Commodities has come out with its analysis on Budget 2014-15. "The budget charisma is now done with and investors focus should move towards the monsoon progress in India, developments in the global market and in turn its impact on the Indian economy", says the report.
According to GEPL Capital, the budget was positive & showed the Governments intent to achieve the Fiscal Deficit target of 4.1% in FY15 & control expenditures. Fiscal Deficit prediction is 3.6% for FY16 & 3% for FY17, says the report.
Dolat Capital has maintained its positive stance on the markets though near term consolidation will be most likely scenario. Valuations at 14.6xFY16E are in the fair range. One can utilise corrections to add to the portfolio, says the report.
The union budget 2014 is positive for the equity market due to the steps taken to encourage foreign portfolio investments and attract domestic household savings into financial savings instruments Moreover, we expect policy announcements outside of the budget, says Sharekhan.
In a nutshell, Budget simplifies doing business in India, increases cap on FDI which will attract long term foreign funds into the economy. With all ingredients of growth in place, economy is set for good times in the foreseeable future, says Aditya Birla Money.
Budget 2014-15: ICICIdirect.com is bullish on domestic oriented sectors like automobiles, cement, capital goods, power, infrastructure, metals, oil & gas and banks. Defensive sectors like FMCG, pharma and IT could lag broader markets. The research firm maintains its December 2015 Sensex and Nifty target of 30,300 and 9050, respectively.
The proposals in the Union Budget 2014-15 are neutral for the construction sector in the short-term, though the governments emphasis on infrastructure creation is a positive in the medium-to-long term, says India Ratings.
The budget did not make any game changing announcements, while the entire speech was filled with thrust on Infrastructure, development in roads, rural and agriculture and making the tax regime rationalized with permitting FDI in both the defense and the Insurance sector: Prabhudas Lilladher.
Religare Retail Research has come out with its highlights on Union Budget 2014-15. According to the research firm, the govt. Aim to achieve 7-8% economic growth rate in next 3-4 years. However, Aiming Fiscal Deficit of 3% in FY16-17.
The union budget attempts to revive economic growth under the given macroeconomic constraint. The government has given a fillip to household savings by raising the tax exemption limits, says India Ratings.
The proposal to relax the banks cash reserve ratio and statutory liquidity ratio requirements for long-term infrastructure bonds, put forth in the Union Budget 2014-15, will not only create an appetite for longer-term investments but also deepen the debt markets, says India Ratings.