Shikha Sharma, CEO & MD, Axis Bank

Actually, the banking industry is so closely correlated to what happens in the economy that one shouldn't overreact to the sudden reactions. Obviously, because the deficit funding seems to be larger than what the market had factored in. Interest rates have gone up and that's the primary reason why banking stocks have reacted the way they have. But, I think, it is a good budget because there is no hike in it.

There are good solid statements of saying that there is not going to be a knee-jerk reaction on any thing but we are focused on infrastructure, on inclusive growth and there is going to be a steady programme of divestment. There is going to be policy reform on which direction has been given. So I would actually say it is a pretty good budget.

The bond yields have been a disappoint in terms of the amount of deficit funding but as the Finance Minister had said even before the budget, there was just so much hype – if you want to provide fiscal stimulus and you want to manage deficit at the same time, it is a tough ask and everybody was expecting that there will be an announcements on divestment.

He has made an announcement on his policy on divestment but the actual fruition of money coming in is going to take time. So, it is just realistic to say it is not going to happen this year – it is probably going to happen next year. There might be some pain in the short run but I think it is good for the economy in the longer run.

If you look at how markets have reacted on yields then it doesn’t look like there is a lot of headroom for reducing PLR's. Thus, I don't think there is a lot of scope for reducing interest rates at this point in time.

There is tax relief to individuals here in this budget. Interest rates have come off relative to last year. So, while it is creped back a little bit but it is still lower than what it was last year and secondly if you look at real estate prices, they’ve corrected.

My own sense is that consumption will begin to pick up – slowly but it will pick up and a lot of the consumption has been driven by rural incomes. So, as long as those remain protected that will also drive consumption. I am a lot more optimistic on the consumption front.

Frankly, I am not at all surprised that there was no statement on financial sector reform in the budget. Personally, I wasn't expecting anything in this budget. As far insurance is concerned, my bet would be that insurance reform will go through but it is going to go through as a separate process not linked to the budget because it is already been tabled in Rajya Sabha so they are just going to take it forward from there.

As far as banking reform is concerned, given everything that's happened globally, it would have been impossible for the government to do anything about liberalizing banking at this point of time. So people have been asking me for my views I said I wouldn’t expect any liberalization on the banking sector right now in terms of ownership dilution. At best what one can expect is that RBI can make a judgement call and increase voting power from 5% to 10% but I don’t think you can really expect a whole lot more than that.

As far as private licenses are concerned I think we have got plenty of banks around, so it is a call for the RBI to take.