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Last Updated : Feb 28, 2011 07:19 PM IST | Source:

A Growth-oriented budget 2011-2012: GEPL Capital

A Growth-oriented budget 2011-2012 by GEPL Capital.

A Growth-oriented budget 2011-2012 by GEPL Capital.

The Union Budget 2011-2012 was a step towards increasing the focus on Agricultural reforms and commitment to Food Security as well as taking active steps to de-bottle the supply constraints thereby trying to rein in the inflation in the next fiscal. Though it would be wrongful to label this as a populist budget, but the Finance Minister tried to meet the demands of all parties impacted by global uncertainty and high inflation and not sacrificing the growth of the economy.

Besides Agriculture, the focus was also on meeting the financial needs of the Infra sector. The Finance Minister has increased the limit of foreign investors by USD 20bn to invest in the infrastructure bond market as one of the several initiatives taken by the government to enhance the flow of funds in the sector. This in turn is expected to boost the infrastructure spending in the country. 

For FY12, Fiscal deficit target has been estimated at 4.6% of GDP much lower-than-expectation. The net government borrowings estimated at Rs.3,430 bn is also a big positive as the excise rates have largely remained unchanged. Overall, Fiscal revenues and deficits are on the optimistic side and sends out a signal that a higher GDP growth is achievable.

Lastly, the biggest positive surprise (in a bid to appease the negative market sentiments) is to allow foreign investors (KYC-complaint) to invest in SEBI registered mutual funds.

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First Published on Feb 28, 2011 06:59 pm
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