'Budget is growth-oriented, part populist & investment friendly'

Finance Minister Arun Jaitley on Saturday announced a budget aimed at high growth, saying the pace of cutting the fiscal deficit would slow as he seeks to boost investment and ensure that ordinary people benefit.  

The finance minister set India's fiscal deficit target for the 2015/16 fiscal year at 3.9 percent of gross domestic product and said it would reduce the target gradually to 3 percent by 2017/18, one year later than previously expected.  

Growth, fiscal, deficit

Shubhada Rao chief economist,, Yes Bank, Mumbai  

"We are positive on the market borrowing program, the net borrowing is in alignment with market expectations. The government is looking to raise revenue through additional resources, which could be gold bonds.  Budget 2015: Complete Coverage

"I think, overall, there are significant amount of growth multipliers embedded in the budget announcements through a sharper focus on expenditure.  

"(On fiscal deficit) I think this is more tenable particularly when the government is wanting to reinvigorate public investments. I think this is more in alignment with government re-igniting investment led by its own programs. We believe to the extent that the government implements its investment program, it will be a positive.  

"I think institutional strengths are getting more clarity here, with the announcement of the debt management office, the monetary policy framework, and GST."  

Abeehk Barua, chief economist, HDFC Bank, New Delhi 

"I think this (higher fiscal deficit) was on the cards because the government had been making a case for public investment.  

"I think this is a very sensible policy, given the fact that a lot of things are crimping the fiscal space available to the centre. And I hope and wish the rating agencies and the investor community in general, understand the rationale behind this.  

"I think trying to stick to a 3.6 percent (fiscal deficit) target would be far riskier, in terms of ultimately ending up with low growth and having to slash expenditure further and getting into this vicious downward cycle that we have been in for the last couple of years, partly because of this fetishisation of a particular number of the fiscal deficit.  

Radhika Rao, economist, DBS, Singapore  

"Today's budget was pragmatic, wide-ranging and inclusive given the emphasis on social safety nets. On the fiscal math, the deficit target has been set at -3.9 percent of GDP, deviating modestly from the roadmap's target of -3.6 percent.  Budget 2015: Complete Coverage

"But the government reiterated its commitment to medium-term consolidation by maintaining the -3 percent target, but delayed the timeline.  

"We had flagged risks of a higher deficit target to accommodate realistic economic assumptions, higher public expenditure and increased devolution to states. The higher target is unlikely to attract the immediate ire of rating agencies and the markets, but will need the higher-frequency fiscal performance to back that faith.  

"Rightfully, public investments have been given precedence to kick start the capex cycle, picking (up) the slack from the stressed private/corporate and banking sectors.  

"Overall, the budget was positive, but we are uncertain if there will be any imminent rate reaction from the central bank."  

A Prasanna, economist ICICI Securities Primary Dealership Ltd, Mumbai  

"This budget will be a good test case whether fiscal stimulus works or not.  

"If growth picks up more than what is being anticipated by the government, then we can conclude that investment-led growth helps growth. But it is disappointing that fiscal deficit targets have been reworked, and it remains to be seen how successful the government will be in implementing that."  

Upstand Bhardwaj, economist, ING Vysya Bank, Mumbai  

"The Budget seems to be more credible, with a higher fiscal deficit target and higher allocation for infrastructure.  

"Clarity in taxation structure will provide more stability ahead. The expenditure switching towards more productive areas is a big boost for growth."  

Nilaya Var, head of Government Services KPMg India  

"Although possibly controversial and against economist expectations, the pushing out of meeting the fiscal deficit target by a year shows pragmatism in bringing in additional public investments for infrastructure development, compensating (for) lack of private investment and showing seriousness on improving overall infrastructure."  

Ananth Narayan, regional head of global markets-South Asia, Standard Chartered, Mumbai  

"Markets were expecting a fiscal deficit target of 3.6 percent to be met in 2015/16, so the 3.9 percent number will be negative for the markets as an initial reaction on Monday.  

"Also markets were not expecting the government to extend the fiscal consolidation roadmap by one year, and we were expecting fiscal deficit target of 3 percent of GDP to be met in 2016/17. But we have to see how this additional money coming out of the higher fiscal deficit will be spent."  

Impact on companies, taxation  

Nitin Jain, CEO of Retail Capital Markets and Global Asset Management, Edelweiss, Mumbai  

"I would rate the budget a 7 and a half on a scale of 10! Though it is a fairly well balance budget, the market expectations were really sky rocketing before this day. So I would not be surprised to see a market correction of maybe 5-6 percent.  

"It is not close to the 'Visionary document' that people have been talking about. Overall, I would still say it is well balanced one.  

"The levy on corporate taxation, rationalization of wealth tax, incentives by more expenditure towards infrastructure are all positives. But nowhere close to what markets were expecting.  

"For NBFCs (non-banking financial companies) the SARFAESI (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act) law is a huge positive.  

"For some infrastructure companies, especially in roads, the EPC (engineering, procurement and construction) companies should do very well.  

"But that is where I would stop. There were much more expectations on infrastructure spending. And more than all of this, the expectation on announcements for banks, as banks are in massive need for recapitalization. The budget fell short on those expectations, but maybe those may follow soon."  

Sachin Menon, COO---Tax and head of indirect tax, KPMG India, Mumbai  

"The announcement that the much awaited GST will be introduced on 1st April 2016, will definitely rejuvenate the industry.  

"The GST will make manufacturing more competitive and thereby support the 'Make in India' Campaign. How fast the Finance Minister will move the wheels of change to usher in GST will be keenly watched in the coming days"  

Foreign investments

Abheek Barua, chief economist, HDFC Bank, New Delhi  

"I think there's been endless controversy for corporates over the absence of a consolidated FII (foreign institutional investor) limit.  

"I think it's just making the process of investing in India and Indian companies that much easier. It is still very much a part of the larger scheme of making India an attractive destination and introducing transparency.  

"The gold monetisation scheme has helped other countries like Turkey. I think it will work. It certainly will help foster one step to a more active gold market in India.  

Enmesh Srivastava, chief investment officer, IDBI Federal Life Insurance, Mumbai  

"GAAR postponement is a big positive and will bring fresh inflows.  

"More importantly, they have clarified that when GAAR comes into force, it will not be applicable retroactively, and that clears a big uncertainty for investors."  

UR bhat, managing director, director, Dalton Capital, Mumbai  

"GAAR deferral is a positive relief. Government wants to be sure that foreign investors don't run away from India. There should be no confusion prevailing on this now.  

"It should provide some stability on perception of India's tax policies. I think there would be a comprehensive review of everything before government actually plans to move to GAAR."  

Nirakar Pradhan, chief investment officer, Future Generali India Life Insurance, Mumbai  

"Having no distinction between foreign direct investments and foreign portfolio investments would provide more confidence to portfolio investors.  

"Both investments would be treated same in the eyes of government and regulators. This should attract more portfolio flows in near to medium term in debt as well as equities."