Sanjay Sinha, CEO, DBS Cholamandalam Asset Management

The budget may not have lived up to the market expectations but it is too much to expect from the new government to pack all policy announcements in a budget that was prepared in just about a month. However, the budget has disappointed on major policy announcements that are any way a cornerstone of its long term economic policy such as a more ambitious disinvestment target and enhanced foreign direct investment (FDI) limit in insurance and retail. The budget has anchored on inclusive growth plank of the government. Social (higher allocation targeting bottom pyramid of urban and rural India) and infrastructure sectors have received higher thrust to revert to higher growth. No new taxes and removal of fringe benefit tax (FBT) and surcharge on personal taxes would lead to the public consumption remaining intact. While minimum alternate tax (MAT) has been increased, we believe it won’t hurt corporate sector.

Rise in borrowings is on account of higher fiscal deficit (which is a concern) and while increase in non-tax receipts leaves ambiguity on its source. Setting of expert group for pricing petroleum products and intention to setup a system of direct transfer of fertilizers subsidy to the farmers is a welcome move and have long term impact on the fiscal position. Hence, though the budget has fallen short of expectations, it is pragmatic considering the economic scenario.