Puneet: Hi, this is Puneet Wadhwa and we have Abheek Barua, chief economist, HDFC Bank with us for the Talk Show right now
Puneet: Hello, Abheek and welcome. What are your thoughts on the Budget proposals? What are the key takeaways?
Abheek: The problem, according to me, was that the Finance Minister tried to fit in too many things. He tried to address each of the challenges facing the economy. There was an absence of a grand plan.
Abheek: But that said, there is a lot of emphasis on fiscal consolidation, which could have some positive effect and give the Reserve Bank of India (RBI) to cut rates.
Puneet: What are you key concerns?
Abheek: On the fiscal front, we have certain concerns. The Budget is based on a fairly aggressive growth target relative to the growth numbers we have now.
Abheek: It is very optimistic on things like divestment, non-tax revenues like spectrum sales, public sector dividends etc. I think there continues to be some under budgeting on subsidies. So there are risks involved.
Abheek: I would say that it is an ambitious consolidation plan where one has to recognise inherent risks. Overall, this budget would have more risks than positives.rn
Puneet: What about the gross market borrowing? Does the figure bother you?
Abheek: Well, the figure of 4.8% is all right given the slippages, which could be there. As of now, I not committing to a slippage number, but the gross borrowing number seen in correspondence with the fiscal deficit number, it seems alright.
Abheek: On subsidies, however, there is an issue. I think the fertiliser and oil subsidies have been under-budgeted. The food subsidy number looks okay.
Abheek: Decision on key policy measures have been postponed like DTC/GST/Land Reform Bill. Your thoughts on this.
Abheek: Well, we didn't expect all this in this Budget. But there could have been a more coherent game plan, which could have been articulated better.
Abheek: Compared to the challenges and the problems like lower financial savings state poses, the decision to increase the eligible income amount from Rs 10 lak to Rs 12 lakh in RGESS was woefully inadequate.
Puneet: So, where do we stand how as regards the inflation, growth rates and the possibility of rate cuts going ahead?
Abheek: As of now, I would go with a much lower growth rate of 6% than what the Budget has assumed. On inflation, I am with the Budget (around 7%). I expect two more rate cuts - one each in March and May.
Puneet: Would you say that with these proposals getting implemented, the worst may be coming to an end for the economy?
Abheek: Yes
Puneet: Thanks, Abheek for your time and inputs
Abheek: Most welcome. Bye
Puneet: Hello, Abheek and welcome. What are your thoughts on the Budget proposals? What are the key takeaways?
Abheek: The problem, according to me, was that the Finance Minister tried to fit in too many things. He tried to address each of the challenges facing the economy. There was an absence of a grand plan.
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Abheek: While most people expect the Budget to be a game-changer, it certainly isn't. There is no grand plan to turn the economy and the public finances around.
Abheek: But that said, there is a lot of emphasis on fiscal consolidation, which could have some positive effect and give the Reserve Bank of India (RBI) to cut rates.
Puneet: What are you key concerns?
Abheek: On the fiscal front, we have certain concerns. The Budget is based on a fairly aggressive growth target relative to the growth numbers we have now.
Abheek: It is very optimistic on things like divestment, non-tax revenues like spectrum sales, public sector dividends etc. I think there continues to be some under budgeting on subsidies. So there are risks involved.
Abheek: I would say that it is an ambitious consolidation plan where one has to recognise inherent risks. Overall, this budget would have more risks than positives.rn
Puneet: What about the gross market borrowing? Does the figure bother you?
Abheek: Well, the figure of 4.8% is all right given the slippages, which could be there. As of now, I not committing to a slippage number, but the gross borrowing number seen in correspondence with the fiscal deficit number, it seems alright.
Abheek: On subsidies, however, there is an issue. I think the fertiliser and oil subsidies have been under-budgeted. The food subsidy number looks okay.
Abheek: Decision on key policy measures have been postponed like DTC/GST/Land Reform Bill. Your thoughts on this.
Abheek: Well, we didn't expect all this in this Budget. But there could have been a more coherent game plan, which could have been articulated better.
Abheek: Compared to the challenges and the problems like lower financial savings state poses, the decision to increase the eligible income amount from Rs 10 lak to Rs 12 lakh in RGESS was woefully inadequate.
Puneet: So, where do we stand how as regards the inflation, growth rates and the possibility of rate cuts going ahead?
Abheek: As of now, I would go with a much lower growth rate of 6% than what the Budget has assumed. On inflation, I am with the Budget (around 7%). I expect two more rate cuts - one each in March and May.
Puneet: Would you say that with these proposals getting implemented, the worst may be coming to an end for the economy?
Abheek: Yes
Puneet: Thanks, Abheek for your time and inputs
Abheek: Most welcome. Bye