The stage has been set for a 50 bps rate cut by the RBI, said Saurabh Mukherjea.
Saurabh Mukherjea, founder of Marcellus Investment Managers, shared his views on the interim Budget and various schemes announced by the government.
"The Budget was along the expected lines. The finance minister has played to every segment electorate the farmers, the informal sector workers, and the middle class," Mukherjea told CNBC-TV18 on February 1.
But there are some concerns around the fiscal numbers, which aren't quite comfortable.
"The 3.4 percent fiscal deficit number that he is pointing to, anywhere between 0.5 to 1 percent of spend seems to be camouflaged somewhere. But this was par for the course in a pre-election year," he said. So, baring that element and baring post-election capex because if you have higher spend number on pro-poor spends you have got to pull back spends. IT was a smart pre-election budget, said Mukherjea.
With regards to the farm income expenditure number, he said, "The outlay is around 0.3 percent of GDP".
"However, the joker in the pack is mega pension yojana because whenever we have done pensions yojanas in our country numerous claimants emerge and this too will spiral up after elections. So, if we add the two that is PM Kissan and the One Rank One Pension, we are giving fillip to consumption of around 0.5 percent of GDP. Therefore, there is fear of capex getting pulled back for the remainder of the fiscal and next fiscal but consumption will get a further boost," said Mukherjea.
According to Mukherjea, "He has set the stage for a 50 basis point rate cut by the Reserve Bank of India by reinforcing the fiscal consolidation message."
The house is positive on both IT and pharma and expect them to benefit from the pro-poor spends and weak currency. Dr Reddy's is the top pick for the house.
According to him, consumption and private banks will also do well.Source: CNBC-TV18