<b>S Naren:</b> Pushing people towards financial savings

Govt has kept the path of fiscal consolidation in mind with the target of 3% for FY19

The finance minister has proposed a pragmatic Budget and continues on the good work that we have seen over the past three Budgets. From the capital markets point of view, while there were some apprehensions on the taxation front, there has been no changes on taxes. This clearly signals that the government is nudging people towards financial savings over physical savings.
 
The government has kept the path of fiscal consolidation in mind with the target of three per cent for FY19. The rural focus and increase in spending on infrastructure is a positive outcome. Giving infrastructure status to affordable housing is also a welcome move.
 
The reduction in income tax in the lowest tax bracket will enhance savings in the hands of the people. This will also positively help the capital markets.
 
I believe substantial flows will come into financial assets as a result of the Budget. The markets could even see a re-rating. Of course, there are challenges in various sectors as far as earnings goes, but the lower interest rates in the economy is a big positive.
 
We believe infrastructure is going to do well. Investors should continue to invest in the market in a big way.

The author is ED & CIO, ICICI Prudential AMC