Budget impact on various sectors: India Capital Markets

India Capital Markets has come out with a research report on the budget. According to the research firm,with over 60% population dependent on agriculture, focusing on key elements like agricultural reforms, rural development, & infrastructure improvements would lead to the next leg of consumption led growth for the Indian economy and there will be no shortage of funds from Private Investors, if they believe that India’s growth programmes are sustainable.

India Capital Markets’ report:

After virtually unprecedented episodes of financial turbulence and economic downturn, with the Indian economy on the cusp of nascent and still uncertain recovery, Union Budget 2009-10 had more expectations riding, than the usual “exemption & levies”. With a slowdown in private sector investment, government’s role in defining the nature of growth has become particularly important.

However identifying the phasing priorities and the risks that needs to be addressed… still remains a key challenge. With the Economic survey of India, prescribing all kind of reforms from FDI in Insurance to Retail, sweeping reforms in direct & indirect Taxes, setting up disinvestment goals etc presented an “ideal” set of measures disregarding the ground realities. With slew of stimulus packages announced in early December 2008 and January 2009 and fiscal deficit being at 6.8% of GDP coupled with absence of “clear” road map to finance it, the scope of further stimulus packages stands bleak. With budget being silent on issues like financing the fiscal deficit, India stands at a risk of overshooting its deficit targets.

Though the scope of budget is vast, we believe with over 60% population dependent on agriculture, focusing on key elements like agricultural reforms, rural development, & infrastructure improvements would lead to the next leg of consumption led growth for the Indian economy and there will be no shortage of funds from Private Investors, if they believe that India’s growth programmes are sustainable. We believe managing risk and sustainable growth is a long term process, and this budget is a “subtle” and a “far sighted” step towards the same.

source: Moneycontrol.com

Tags: budget 2009, budget stocks 2009, impact of budget 2009, long term investors

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