 "S Naren")
The Budget has gone a long way in trying to balance the government's income and expenditure, while adhering to the path of fiscal consolidation. This can pave the way for a reduction in interest rates, thus benefiting corporate India.
The focus on roads and rural electrification is vital for boosting capital spending and signals the government's growth intentions. One would have liked to see a slightly higher allocation for recapitalisation of banks, given that they will lead the economy in credit growth when revival kicks in. Nonetheless, the Budget is still a big enough boost and shows that the government is steadfast in supporting banks. The announcement on operationalising the Banks Board Bureau to streamline public-sector banks will further help the banking system.
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There were positives for industry in the reduction of corporate taxes for smaller companies and for new manufacturing companies. Another area that has got a boost is affordable housing, which will keep the growth clock ticking. While it may seem like the Budget didn't have much for investments, there is enough for the financial markets to do well in the long run.
S Naren
Chief investment officer, ICICI Prudential
