‘Safe Budget’; no announcement on subsidies disappointing

Ritesh Jain
Tata Asset Management

“An overall ‘safe budget’ from a government which has been in power for around 45 days. Major disappointment by not treading into the much anticipated subsidies zone.

However, attention to some micro details was positive. Stance on fiscal deficit to be maintained at 4.1% looks daunting – pressure will be on curbing expenditure as Rs.15000cr lower net tax revenue. Clearly a thrust towards infra funding with relaxation on raising long term bonds.

Another major disappointment was no major clarity on PSB consolidation and recapitalization. Only a passing reference is all that we got on consolidation and no hike in budgetary allocation to bank capitalization.

Overall, this government wants to vacate the space for industry to manage itself – minimal government could be expected in the next 5 years with maximum governance.

We believe it lays a strong foundation for regaining growth traction over next 3 years and presents an opportunity for equity investments for 3 year holding period especially in themes laid down by government in the budget.

We expect a softening trend in interest rates and inflation over 18M to 2Y period and as such debt mutual funds present a good investment opportunity at this stage with a 3 year view notwithstanding the changes in taxation of debt mutual funds”.


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Mutual Funds plunge as markets slip

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Mutual Funds decline as markets slip on profit booking

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Birla Sunlife Midcap Fund: Review

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Mutual Funds advance as markets end higher

Equity Mutual Funds advanced as the Buying in oil & gas and banks stocks in last hour trade helped the equity benchmarks end at record closing highs on Friday ahead of big events next week – NDA government’s Budget for 2014-15 (on July 10) and April-June quarter earnings starting off with Infosys (on July 11). … Continue reading