The Union Budget for 2022-23 presented on February 1 by Finance Minister Nirmala Sitharaman met the stock market’s expectations of pushing for growth while not blowing the fiscal deficit.
The government boosted expenditure on capital formation by over 35 percent for the second year running and indicated that the fiscal deficit will reduce to 6.4 percent. While the fiscal deficit target for 2022-23 was higher than investors’ expectations, the pro-growth focus more than offset the concerns on that end.
The optimism of investors was reflected in the performance of the equity market with the Nifty 50 and BSE-Sensex index closing nearly 1.5 percent higher even after giving up all of their gains at one point during the session.
That said, let’s take a look at how various stalwarts of Dalal Street reacted to the fourth Budget of the finance minister.
Prashant Jain, executive director and CIO at HDFC AMC
A remarkable budget. It maintains continuity in policy, stability in taxation, and consistency in the strategic direction of the economy. Focus is on infrastructure, logistics, manufacturing, ease of doing business, Make in India, digital ecosystem etc. without losing sight of social objectives and Covid impacted sectors. The revenue assumptions are conservative and fiscal targets are therefore likely to be met.
Vaibhav Sanghavi, Co-chief executive officer at Avendus Capital Public Markets Alternate Strategies
Budget 2022, reflects the focus and consistency of the Government, in its approach towards encouraging the supply side, over the years. The jump in capital expenditure is very encouraging and will continue to provide an impetus to the overall growth led by manufacturing.
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It is also encouraging to see the measures and incentives that will help our nation transit towards reducing carbon footprint, flowing from the commitments at COP26, the climate change conference.
Harshad Patil, CIO at Tata AIA Life Insurance
The Union Government delivered a pro-growth budget while attempting a modest fiscal consolidation. The Government’s focus was on promoting capital expenditure for triggering higher economic growth multiplier and crowding-in private capex. The Budget provides a sustained impetus for creating world-class integrated multi-modal transport and logistics infrastructure while focusing on inclusive development, facilitating energy transition as well as providing a roadmap for financing investments.
Nilesh Shah, group president and managing director at Kotak Mahindra AMC
"This budget is focussed on supporting growth through encouraging investments and encouraging entrepreneurs, start-ups and taxpayers by creating trust. This budget is about laying the foundation for the positioning of the centenary of India. Hopefully, there is an upside on revenue receipts.
Mahesh Balasubramanian, MD at Kotak Mahindra Life Insurance
Leading into the budget, there was a common view that for a broader sustainable growth - both the government and private sector - capex needs to be stepped up.
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In this context, the finance minister has been very bold and has unveiled a Go for Growth budget on the backdrop of the PM Gati Shakti transformative approach.
Nitin Sharma, director, research and India site head at Fidelity International
The budget is growth-oriented, with the key highlight being the 35% higher government capital spending target on an already high base. The Finance Minister has focussed on putting in the critical multipliers to create a more sustained growth cycle rather than just a one-off impact. There were widespread expectations of some measures, such as tax cuts to support consumption, which did not come true. However, the growth bias was needed as we navigate our way out of the pandemic.
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