Among other things, the finance minister has stressed on foreign investment to curtail fiscal deficit and on maintaining a balance of inflation and GDP growth. More importantly, he has not announced any pre-election-year sops like farmer waiver.
The finance minister has also cut the securities transaction tax on equities and mutual fund units from 0.17% to 0.1%, which will help boost investment sentiment. Major beneficiary sectors include textiles and infrastructure.
The exemption of excise duty on readymade garments is positive for textiles. Upgradation scheme for smaller and unorganised players will help recovery of the sector.
As for infrastructure, the support to infrastructure debt funds is encouraging, more so since banks have limited access to the sector and are unable to increase exposure to infrastructure projects.
Indeed, the Budget has given more than was expected by infrastructure players. Enhanced corpus for MGNREGA, PMGSY, RIDF and Indira Awas Yojana, along with increased funds for NABARD so that refinancing can be extended to projects pertaining to warehousing, cold storage, etc will go a long way in addressing the supply bottlenecks that have been fuelling food inflation.
The decision to announce 3,000 km of new road projects in the next six months, the proposal to build two new ports (in West Bengal and Andhra Pradesh), a harbour in Tamil Nadu, dredging of national waterways, proposal to create a grid (combining ports, inland waterways and roadways) augur well for the infrastructure sector. Work on three industrial corridors is also something to cheer about.
The writer is head of capital markets, Religare