The Rs1.5 lakh crore capital expenditure/investment is expected to generate a Rs3-4 lakh crore multiplier boost to the economy; While short-term volatility could be par for the course due to the current global economic backdrop, the long-term direction rooted in policy prudence and support for growth should bolster Destination India’s credentials for foreign and domestic investors alike."
Navneet Munot, MD & CEO, HDFC Asset Management Co. Ltd.
Nimesh Chandan, CIO, Bajaj Finserv Asset Management:
FinTech BizNews Service
Mumbai, February 1, 2025: Union Minister of Finance and Corporate Affairs, Smt Nirmala Sitharaman presented the union budget for the FY2025-26 in the Parliament today. The leaders of MF, AMC industry have welcome various provisions of the budget:
Navneet Munot, MD & CEO, HDFC Asset Management Co. Ltd.:
"Budget walked the talk on fiscal consolidation without losing sight of the much-needed consumption boost needed to stimulate economic growth. Government has been doing heavy lifting on public capex. Now, spurring consumption by putting more money in the hands of taxpayers is a step in the right direction. Government’s intention of investing in economy, people and innovation was the need of the hour to harness India’s demographic edge. Set-up of Fund of Fund aimed at start-ups, along with a focus on MSMEs fosters entrepreneurship and could transform India from a nation of job-seekers to job-creators. Simplification of tax structure and ease of compliance should aid in investor confidence and stimulate both, domestic and foreign investments. While short-term volatility could be par for the course due to the current global economic backdrop, the long-term direction rooted in policy prudence and support for growth should bolster Destination India’s credentials for foreign and domestic investors alike."
A Balasubramanian, Managing Director & CEO, Aditya Birla Sun Life AMC Ltd.:
"The Union Budget 2025 prioritizes consumption-driven growth. Measures like simplified tax structures and reduced surcharges combined with a focus on agriculture and rural incomes should boost overall sentiments, consumption, savings, investments and support key sectors like consumer durables. The Rs1.5 lakh crore capital expenditure/investment is expected to generate a Rs3-4 lakh crore multiplier boost to the economy. Expected interest rate cuts will lower capital costs and fuel economic expansion and employment.
All of this should improve economic and market sentiments in an uncertain global order and boost investor confidence. Despite short-term market volatility, robust fundamentals make India a promising opportunity for long-term investors."
Aashish P Somaiyaa, Executive Director & CEO, WhiteOak Capital Asset Management:
“Government has been successful in architecting a prudent Budget that provides capital expenditure support to investments in the economy with Rs 1 lakh cr worth of tax concessions to citizens while continuing the path of fiscal consolidation, bringing estimated deficit in FY26 down to 4.4%.
The budget announcement has come at a time when there are growing concerns of perceived rise in taxation and slowing consumption in urban economics of India. Financial support to weaker sections of society and to women in recent state elections, the announcement of 8th Pay Commission and now restructured individual tax brackets brings more money in the pockets of taxpayers pointing towards prioritization of ushering consumption in the economy. Apart from this the budget announcement outlined some very welcome steps towards ease of doing business, reforms to boost tourism, expanding the UDAAN scheme, encouraging investment in generation of nuclear energy and encouraging Indian exports in the international arena.
Despite this, the macro bulls did not come in force and the intraday play largely remained bearish.
The world is pivoting towards becoming bilateral as opposed to multi-lateral, a lot of business agenda will get driven by trade agreements in upcoming times with major player like USA which is looking for alternatives to China. Sometime soon, US markets will cool off once the initial AI euphoria is behind us and the dust settles with actual use cases and more grounded assessments come through; the dollar is likely to give up some of its strength allowing the rupee to stabilise, FPI flows will normalise and then this budget will look just great. It is time to get back into the markets, hopefully the worst is behind us. Indian investors should review their portfolios and take cognizance of factor and sector rotation in the markets.”
Deepak Agrawal, CIO- Debt, Kotak Mahindra AMC:
“The Central Government Budget for FY2025-26 continues the path of fiscal consolidation with fiscal deficit of 4.4% of GDP. The assumption for budget looks credible with nominal GDP growth of 10.1% with tax buoyancy of 1.08. The Govt. continues to spend on capex with budget estimate of Rs 11.21 trillion for FY2025-26 with growth of 10% over revised estimate for current year. Gross Borrowing number is at Rs 14.82 trillion which is slightly higher than market estimate. The same may lead to marginal hardening of G-Sec yields in near term. However, with RBI MPC meeting next week and expectation of continued liquidity measures and start of rate cut cycle with 25 bps policy rate cut, rates likely to remained anchored.”
Mahendra Kumar Jajoo, CIO Fixed Income at Mirae Asset Investment Managers (India):
“The budget is expected to provide a major boost to consumption with the massive reliefs on income tax front for the lower and middle class. At a time when the economic moment was slowing down and incremental capex was beginning to generate a declining multiplier factor on the margin, as was desired by most analysts, budget has delivered this mega booster for renewed consumption boost. Along with sustained capex, economy is expected to regain the lost momentum in quick time. Continuing to adhere to the guided fiscal consolidation path even while providing tax relief is another positive feature which should help improve India's rating upgrade prospect. RBI is also likely to take note of the same and a progressively more accommodative monetary policy is to be expected in the near term.”
Nimesh Chandan, CIO, Bajaj Finserv Asset Management:
“This is the first full fiscal budget of NDA 3.0 & has traits of being a vision statement. The government has continued the path of fiscal consolidation. In fact, among the major economies, India has seen the best fiscal consolidation. This also creates room for monetary easing for RBI. The recovery post-Covid-19 was a ‘K’ shape recovery. Wherein, the upper segment has done well, but the middle & lower levels did not grow much. This budget takes care of this difference by reducing the burden on the middle class taxpayers. The allocation on capital expenditure was a tad lower than expected but will be much better than revised estimates for FY25. The Government has also outperformed on its fiscal consolidation target for both FY25 and FY 26, at 4.8 per cent of GDP and 4.4 per cent of GDP respectively. The net borrowing numbers are as per market expectations. This budget is likely to have a positive impact on economy, businesses and markets. “
