The Hindu Business Line : Budget will stimulate growth: Citi

Mumbai/Chennai, July 6 Foreign institutional investors (FIIs) had a mixed reaction to the Budget announcements – ranging from disappointments to saying measures would bear fruit in three to five years.

Mr Mark T. Robinson, CEO, Citi South Asia, said: “As a statement of the fiscal position of the economy, a Budget should provide overall direction for the forthcoming year. I expect this Budget will stimulate growth, investment and job creation in a variety of core areas pertaining to infrastructure, agriculture, education, exports, IT and small industry. While these measures should collectively promote the building of a resilient and competitive economy, particularly welcome is the candid acknowledgement that the unanticipated 6.8 per cent fiscal deficit is a cause for concern and needs to be addressed.”

Mr Tushar Poddar, Vice-President & Chief Economist, Goldman Sachs India, said: “India’s Union Budget continued from where the last stimulus packages left off, with a big increase in spending and tax cuts to continue the impetus to growth. The spending measures focused primarily on infrastructure and rural spending, especially NREGA (the rural employment scheme), with the mantra being inclusive growth.

“The fiscal deficit is slated to increase to 6.8 per cent of GDP, higher than our expectations of 6.5 per cent. The consolidated fiscal deficit may rise from 10.1 per cent of GDP in FY09 to 10.4 per cent of GDP in FY10.”

“From the stock market and the debt market perspective, the Budget proposals have been benign, with nothing negative for any sector,” said Mr Sachdev, Country Manager-India, and Regional Manager for Fund Management for South-East Asia, Shinsei Bank.

“We believe that the stock markets have clearly overreacted due to undue over-expectations and rationality will set in over time. This may be a good time to enter the market if one has a three-to-five-year focus.

“The budget has made a positive step by reducing transaction cost by abolishing the STT for investment transactions in the NPS.”

More Stories on : Foreign Institutional Investors | Budget

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page