Last Updated : Feb 28, 2013 05:16 PM IST | Source: CNBC-TV18

Budget 2013 requires additional analysis: Rana Kapoor

Rana Kapoor, Founder & CEO, Yes Bank shares his view on the Union Budget 2013.

Rana Kapoor, Founder & CEO, Yes Bank shares his view on the Union Budget 2013.

Below is the verbatim transcript of Rana Kapoor's interview on CNBC-TV18

Q: The bond markets have acted adversely. What is your sense of this borrowing, after all the net of 4.84 is very much within the range we got before we went into the Budget? Do you think there is maneuverability, elbowroom for the Reserve Bank of India (RBI) with this kind of a borrowing to cut?

A: The overall government borrowing that has been projected appears to be on the higher side specially when looked in the backdrop of the overall expenditure going up by almost 30 percent. That is creating a negative impact on the market, but overall year-on-year it is a very modest and a reasonable increase. It is quite reflective of the year-on-year growth on a much larger denominator. So, it is an overreaction. I expect that within a day or latest by tomorrow it should stabilise back to pre-Budget levels.

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Q: What is your view on the Budget outcome as most of the industry is disappointed that there are not too many incentives for growth this time? Would you be disappointed as well?

A: As always, industry and individuals tend to over expect from the Budget given the constraints of the economic space as the finance minister very lucidly said, I do not think there could have been better developments because there are a lot of growth injections across the board particularly the investment benefit to restore confidence in building and investing more in the future.

On roads, the establishment of road regulator and the fact that 3,000 km of roads are very visible in relatively safer states. The announcements and very specific so for the initiation of two smart cities out of the seven in the Delhi-Mumbai Industrial Corridor (DMIC) and that too Gujarat and Maharashtra becoming reality after almost five years of DMIC planning.

The two southern corridors, is a good news. Some rationalisation of the period for power projects will help in some risk mitigations. The booster on agriculture is almost like 2.5 times investment in the eastern hemisphere of the country and a new allocation for agriculture for helping crop diversification.

The parfaits to micro small and medium enterprises (SMEs) have been fairly abundant, rural housing, urban allocation. You have to look at these growth injections in totality because they are more than many drivers and they address, not just financial inclusion but also address the growth across the board that the country needs at this particular point in time. So, additional analysis will help rather than the market react, as they are presently.

First Published on Feb 28, 2013 05:15 pm