"There are people out there who believe good things will come from budget," Mark Mobius added.
Infrastructure and jobs are the need of the hour and the government needs to boost infrastructure spending by at least 30-40 percent, according to Mark Mobius, Founding Partner of Mobius Capital Partners.
The Union Budget 2019 will be presented by Finance Minister Nirmala Sitharaman on July 5.
"Hopefully, the new government will introduce the changes that will encourage more infrastructure spending and that will produce more jobs for people in the rural sector,” Mobius in a July 4 interview with CNBC-TV18.
When asked what the government can do to boost the economy, he replied, “The government can even continue to lower interest rates, which will be good and not worry too much about the deficit – right now it is about 3.5 percent of the gross domestic product (GDP), it can go up to 5 percent with no problem at all.”
"There are people out there who believe good things will come from budget," Mobius said.
The government should also introduce more privatisation of state-owned enterprises and projects. A lot of the infrastructure such as toll roads, bridges could be done by the private sector under the right conditions, he added.
Speaking about the global economy, he further mentioned, “The growth in the US has been very good. How long will it last is another question but 3 percent or so is a very strong economy and that affects the global economy despite all the trade problems that we have been talking about. I do believe the Chinese and Americans will come to some interim agreement but I hope that India can take advantage of this and hopefully, get some of the Chinese business over to India again to attack the employment problem.”
On the auto sector, Mark said, “It is going to be difficult for both four-wheelers and two-wheelers. We are looking at some two-wheelers. The competition is very intense and there are so many technological changes from gasoline to electric or hybrid. I think the companies are finding it difficult to keep up and this is a big issue going forward as well.”Source: CNBC-TV18
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