Post Budget Quotes from Ashika Group

Mr. Ashutosh Mishra- Head of Research – Institutional Equity at Ashika Stock Broking

The union budget of 2022 is a very capital-intensive budget and bodes well towards the government’s vision of pushing infrastructure and manufacturing as two of the key sectors to be intensified. The greater emphasis on commitments for ‘Made in India’ is revenue-generating as well as creating employment opportunities all over the country. With progressive measures being taken towards bolstering the digital transformation in the country, there will be positive effects in sectors of education, healthcare, fintech, banking, and upskilling. The fiscal deficit is estimated at 6.8% of GDP in FY22 (vs 9.5% in FY21). The government intends to narrow this to below 4.5% of GDP by FY26. With the setting up of a DFI with initial capital of INR 200bn, to finance capex, and continuing the PLI schemes, the government is committing itself to a growth manifesto and a holistic budget that is futuristic and not just limited to a fiscal year. With concerted efforts towards boosting infrastructure, logistics, digital transformation, and introduction of digital money, the government intends to reach out to the unbanked and unserved populace of the country. It is a universal budget and an inclusive budget. While it may not be a populist one, but it is a long term, growth-oriented budget and that itself is a positive place to start off with. There is also an added importance to support faster debt resolution and deepen the corporate bond market by the proposal of a permanent institutional framework to purchase IG bonds during stress scenarios.

Mr. Viraj Vyas- Technical & Derivatives analyst, Ashika

The union budget overall looks positive and is focused on an economic recovery mindset, with the pandemic and its repercussions as its premise. However, the budget looks quite moderate, over what was anticipated. Nifty Index has been undergoing price and time correction since October 2021 and while the Budget is usually a strong event, this year’s budget was on a tepid note. The major theme seems positioned in favour of the infrastructure development in India. What particularly stood out was the gusto with which the intraday dip was bought into might signal a change in stance from market participants. Going forward, I would continue to be skeptical on the Index if 18,300-18,500 level is not taken out with a price intense move. Having said that, few pockets in the market look attractive like the Cement, Capital Goods and specialty chemicals space and I would continue to watch stocks in this space. Also, on a positive note, there has been no tax increase, which also comes as a relief. Fiscal austerity overall has been masked by economic growth. The seven engines on which the budget has been outlined as a vision budget are roads, railways, airports, mass transport, ports, waterways, and logistics infrastructure which will be supported by energy transmission, IT, water, sewerage and social infrastructure. These are the areas to look forward to and we will expect to see the government’s commitments to these sectors.

Mr.Amit Jain- CEO and Co-Founder of Ashika Wealth Management

“This budget looks to be very pragmatic, conservative & growth-oriented for the Indian Economy. Apparently, it looks like that government is trying to commit & over deliver on both the Economic & Fiscal front. If I summarise the budget 2022-23 theme, then I will say it is a “ Green-tech “ budget with “ self-sufficiency” as the underlying theme. In my view, in this era of Deglobalisation & re-emerging Geo-political power game between the Western World on one side & Russia, China on the other side, India has to be a self-reliant Economy by 2040. This budget takes a step further in that direction along with Long term directional move for the Green Energy Economy & making India a manufacturing hub in the medium to long term. From here on Capital Goods, Infrastructure & Defence sector should be in focus. We appreciate the government’s move for raising funds through Green Energy funds, which may be a Game Changer for selected PSU’s, as there are a lot of Global Funds who invest in these ESG bonds & re-engineer the old Economy fossil fuel-based business models to new age green Energy business models across the Globe. We welcome the government’s move to digitalise 1.5 lacs post offices across India & creating 75 digital bank units, which will merge the rural informal economy into the mainstream Economy. Also, blockchain-based digital INR is going to be a pride for India as a country. It will place India at par with the elite stature of the Western World.

In our view, this ongoing decade of 2030 is going to be the decade of capital Expenditure by Indian Corporates, as we are at the verge of beginning a new bull run of the Indian Economy & this beginning can not be better than this budget as Government itself has surprised by increasing proposed capital expenditure to Rs.7.5 lacs crores, which is an increment of almost 40% compare to the last budget & almost double for FY 2019-20. Also, a directional call for targeting fiscal deficit @ 4.5% by FY 2026 & limiting surcharge on long-term capital gains at 15%, is a soothing statement for Capital Markets. By taxing digital assets @ 30%, the Government has recognised Cryptocurrencies as an asset class, which may be a relief for 10 crores of Indian Investors, as now it will be an accepted Asset Class for Indian Investors.

In my overall evaluation of this budget, I feel this budget will be the foundation stone for the Indian Economy to unfold its locked value in the long run.”

Mr. Paras Bothra – Personal Finance

“This Union Budget has been a positive one with an emphasis on capex boost, which defines the government’s pro-growth stance. The markets are reacting favourably to the budget. If you look at the capital expenditures, that has been raised to 35.4% to fund various infrastructure projects. That bodes well for a balanced and rapid recovery of the economy. The public investment will aid a very resilient India to come out of the pandemic distress. However, the focus on consumption is less emphatic as compared to the capex part of the economy. The fiscal deficit also remains a bit elevated, though it is going to be lower than last year. So, infrastructure, capital goods, manufacturing led companies who have been given investment too, along with the solar production-linked incentive (PLI) scheme, affordable housing amongst others are the areas where the Government has laid major emphasis. The budget aims towards long-term growth with a focus on clean energy, which is also one of the key drivers of the future. The spendings are all growth-oriented, focused towards creating employment, and boost overall agri-economy and infrastructure creation”.

Mr. Harsh Tewaney- Auto Sector Analyst, Ashika Stock Broking

“The budget envisages a battery swapping policy that will help overcome a key hurdle of setting up charging stations which hitherto has been moving at a slower-than-desired pace thereby acting as a deterrent for customers willing to switch to electric vehicles. Making a provision for interoperability standards as announced by the hon’ble FM will allow the industry to collaborate, innovate and expedite a robust battery-swapping network around the country. This will act as a catalyst to promote electrification as many customers are apprehensive of the time taken to charge a battery and the availability of a swappable battery will be as good as re-fuelling a conventional vehicle which will go a long way in assuaging their anxiety”.

Mr. Jason Soans- Senior Analyst

“The budget is a strongly capex-oriented budget and sets the platform for a robust capex cycle. Budget augurs strongly for quality infra and capital goods players with strong execution skills and healthy financial discipline. One of the best news was that there were no new changes to tax slabs and tax rates, which came as a relief. The budget shows the government’s focus on continuing its commitment towards reviving and bolstering the economic health of the country, with a strong focus on climate change policies, inclusive development, infrastructure, and health and well-being. If you notice, then all these sectors are revenue-generating and have huge scope and potential for job creation and employment, skill upgradation and rooted to the ‘Made in India’ cause. Some key positive announcements steered towards digital currency, PM’s Gati Shakti National Master plan that focusses on logistics and infrastructure, railways, and roadways. Digital education also has been the focus and that shows the government’s commitment to education for all and all those affected by the pandemic’s remote learning arrangements. With added attention to ‘Digital India’ and introduction to ‘Digital Rupee’ using blockchain technology. This major thrust on digital banking is good news for the underserved regions of India and is a great bolster for the fintech sector. There have been some incredible announcements targeted at mental health programs, digital health ecosystems, benefits to women and children via the Mission Shakti, Mission Vatsalya, Saksham Anganwadi, and Poshan 2.0. With the additional boost to the start-up’s sector, I reckon, this budget is not just an annual budget, but a visionary one, with a projection for a futuristic India”.