Moneycontrol
Jan 27, 2017 10:17 AM IST | Source: CNBC-TV18

Budget 2017: Govt may spend more on rural economy, infra, says Sundaram MF

Sunil Subramaniam, CEO, Sundaram Mutual believes 2017 the government will focus on rural economy and infrastructure space in the upcoming Union Budget as they will aim to kick-start the economic growth.


in the upcoming 2017 Union Budget the government will focus on rural economy and infrastructure with an aim to kick-start the economic growth that had slowed down due to demonetisation and other global factors like Trump's protectionist policies, says Sunil Subramaniam, CEO, Sundaram Mutual.  

Subramaniam sees 60-70 percent chance of deficit spending. Instead of improving the fiscal deficit, the government would use the increased wallet to spend on the economy, he says.


While foreign institutional investors may not react well to this, the government is likely to remain focussed on infrastructure spending. He notes the FII allocation in India has already waned on account of dollar strengthening and shifted more to commodity-intensive markets like Brazil and Russia.


He thinks there is 50 percent chance of easing off of corporate taxes, which are at a high level. Moreover, with the unorganised sector moving towards organised sector, the tax pool will go up, which leaves room for government to ease corporate taxes, says Subramaniam.


Overall, over the long-term he expects the government to do away with tax free avenues.

For the entire discussion, watch video

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