30 Jan 2023

The Union Budget for 2023-24 (Apr-Mar) is around the corner, and like every year, markets are abuzz with expectations. What sets apart this year, though, is that this Budget is ahead of the general elections in 2024, and the government may want to continue with its thrust on infrastructure, while keeping taxpayers’ expectations in mind.

We caught up with Mr Nilesh Shah, our group president and managing director, for his thoughts on the Budget and this is what he has shared –

Q. What is your overall expectation from the Budget?

A. The government will have to maintain a balance. Investors and markets are expecting the government to spend on infrastructure, education, as well as healthcare, and the government must find a way to do this while maintaining fiscal prudence. It must also find a way to raise non-tax resources.

 

Q. What is the expectation in terms of capital expenditure?

A. Even though we have a high base from the previous year, we can expect a 15-20% higher allocation, while focusing on the execution of such projects.

 

Q. How can this be executed at a time when we are already running a trade deficit?

A. Production-linked incentive schemes should be introduced in areas such as education, tourism and coal mining. India’s Jan Dhan Yojana scheme saw savings being financialised, and on these lines, the government can consider a scheme like Jan Nivesh Yojana, which can help channelize savings, and develop capital markets. 

 

Q. Do you expect the Budget to lean towards spending on the social sector given that general elections are scheduled for 2024? And how do you think markets will perceive it?

A. A higher allocation for the infrastructure and cutting down on wasteful expenditure is the need of the hour for the economy. But given that we are seeing consumption slow down, especially at the lower sections of the economy, any spending which can spur consumption is likely to be taken by the markets in their stride.

 

Q. Any expectations for the capital market?

A. It is important for the government not to raise the tax rate for capital gains, as investors are already paying securities transaction tax. The government can also consider having a uniform tenure for asset classes, which will help clear confusion for investors, and also create a more conducive environment for the creation of capital in general.  

 

Q. What do you expect the essence of the Budget announcements to be like?

A. If I can put it in a cricket analogy, an ideal Budget would see the Finance Minister batting like Suryakumar Yadav, bowling like Umran Malik, and fielding like Ravindra Jadeja.

 

 


 

 

This article may include statements/opinions which contain words or phrases such as "will", "believe", "expect" and similar expressions or variations of such expressions, that are forward-looking statements. Actual results may differ materially from those suggested by the forward-looking statements due to risks or uncertainties associated with the statements mentioned with respect to but not limited to exposure to market risks, general exposure to market risks, general economic and political conditions in India and other countries globally, which have/ may have an impact on investments, the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices etc. This is not intended for distribution or use by any person in any jurisdiction where such distribution would be contrary to local law or regulation. The distribution of it, in certain jurisdictions, may be restricted or totally prohibited and accordingly, persons who come into possession of this material are required to inform themselves about, and observe any such restrictions. Past performance may or may not be sustained in future. Kotak Mahindra Mutual Fund is not guaranteeing or forecasting any future performance. Investors may consult their financial experts before making any investment decision.

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© Kotak Mutual Fund.2024
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
© Kotak Mutual Fund.2024
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
© Kotak Mutual Fund.2024
Mutual fund investments are subject to market risks, read all scheme related documents carefully.