Mar 16, 2012, 07.12 PM IST | Source:

Expert's view on Budget 2012-2013

Budget 2012 was more or less headed in a right direction. Read this space to know what the top-notches of Mutual fund industry think of Budget 2012-2013.

Finance Minister Pranab Mukherjee today presented Union Budget 2012, the 81st Budget in India's history. Individually, this is Mukherjee's seventh annual Budget, second-highest by any Finance Minister.

Below are opinions of some of the top level executives of the mutual industry on Budget 2012-2013.

Mr.Sanjay Sachdev - President and CEO, Tata Asset Management: "Budget is pragmatic.  Focus on fiscal deficit is a welcome step. The growth number looks achievable. Reduction in personal tax rates up to Rs 10 lac gives relief to a large section of people. Also capital market related measures such as Rajiv Gandhi Equity Saving Scheme and reduction in STT on delivery transactions will provide much needed impetus to attract small investors to the market."

Mr Murthy Nagarajan, Head – Fixed Income, Tata Asset Management Ltd: “The total Gross borrowing programme of 5.69 Lakh crores and net borrowing of 4.79 Crores is higher compared with market expectation. The fiscal deficit number of 5.1 %  of GDP is however more realistic.  The borrowing programme will be front loaded, due to lower revenue receipts and higher redemptions in the first half of the financial year. The ten year G sec yields may trade in the band of 8.10 – 8.60 % in the first half of the  financial year.”

Nimesh Shah – MD & CEO, ICICI Prudential AMC: "The Union Budget 2012 has been a tight ropewalk between triggering a roadmap for fiscal consolidation and managing development & popular sentiment. The increase in Service Tax by 2% and an increase in excise duty were anticipated and have resulted in some fiscal respite.  The introduction of the Rajiv Gandhi Savings scheme is a clear positive for the equity market by way of increased long-term investor participation. In addition, reduction in STT on delivery by 20% has added to the investors return potential for equity. Going forward the budget will have to be followed by a decrease in subsidy in tune with the budget estimates. The market will require the government to take the fiscal consolidation roadmap ahead with possible increase in oil/ petrol prices, which will be crucial to providing RBI headroom for significant rate action. Until then it is over to affirmative execution by the government."

Mr. Rajat Jain, CIO, Principal Mutual Fund: “There are no major negatives with the budget. It is broadly on expected lines, and there are major surprises either way. The numbers for the fiscal deficit are more realistic than they were for the last year, and with the rise in excise duty and service tax rates, should not be too difficult to get to. The government has to focus on keepings its expenditure close to the budgeted number, with about 9% increase built in the non- plan expenditure figure. The breaks given to the infrastructure sector and companies are welcome.  The opportunity for FIIs to invest in domestic corporate debt is a positive, and may lead to a deepening of the bond market.”

Mr. Akshay Gupta, MD&CEO, Peerless Mutual Fund: “The budget trajectory is headed in the right direction. Despite baby steps, the fiscal consolidation exercise is positive for country’s finances. A good announcement on Power, Infrastructure, Agriculture and cap on subsidies is positive. Increase in excise and service taxes and lower than expected targets on disinvestment will lead to continuity on a high- inflationary and higher interest rate regime. There is no indication GST and DTC roll-out, which was largely expected, is surprising”


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