INVESTMENT BANKER

SUMIT JALAN

Expectations

To boost consumption, the government could reduce GST or simplify it further. The main thrust, it is anticipated, will come from either government spending or providing incentives to private sector to increase investment. We hope that the government takes the lead on investing in infra projects. In terms of investing trends, we hope that 2021 will continue to see greater capital allocation to new sectors --tech, digital, service-oriented and biotech.

OUTCOME

This budget is fiscally bold, procedurally reformist and expenditure-led. With the unprecedented increase in capital expenditure, the government has sent a clear signal that it wants a return of the animal spirits {in the economy}. While this bodes well for equities, it may put some pressure on the sovereign credit costs and ratings. The government’s efforts to improve digitisation, increase affordable housing, tackle non-performing loans and hike FDI {foreign direct investment} limits will be crucial to boosting private consumption.