Budget’s focus on consumption, employment than capex to cheer FIIs, says Saurabh Mukherjea

Saurabh Mukherjea, Founder of Marcellus Investment Managers

Union Budget 2024's focus on boosting consumption and maintaining fiscal discipline will be taken positively with long-term investors, both domestic and international, Saurabh Mukherjea, Founder of Marcellus Investment Managers told Moneycontrol.

"In terms of FII positioning, they'll be ready to make a beeline to India. They have turned buyers which is in sharp contrast to how they were positioned before the elections," Mukherjea said.

The latest Budget saw a shift from previous years’ emphasis on government-driven capital expenditure (capex) to prioritising consumption and rural development. Mukherjea said that this pivot shows the government is trying to stimulate domestic demand even as it tries to keep fiscal deficit within acceptable limits.

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According to Mukherjea, FII's like consumption and private sector banking. "FIIs are not particularly keen on loading up on government capex because government capex tends to come and go depending on the political realities on the ground."

"The FM is signalling that the government wind is blowing in favor of helping consumption, juicing up employment. I think this sort of budget is pro FII," Mukherjea said.

What Mukherjea found more encouraging, from a long-term investor perspective, is the government saying that not only will it stoke consumption and try to juice up consumption but it will do so without compromising on fiscal rectitude. "I think that's just brilliant."

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