Markets were expecting too much from Budget: R Venkataraman

In conversation with MD & CEO, IIFL

The market took the Budget with a red tick while the analysts and market heads seem to think otherwise. Decoding the markets behavior, R Venkataraman, MD and CEO, IIFL believes that markets were expecting a bit too much and secondly it was the expiry for the February series today.  He highlights that Budget is just a statement of accounts so it’s not like the Finance Minister will make policy reforms only in Budget.

Even though over the past three four years Budgets have always been populist but Venkataraman says that the current Finance Minister has resisted the temptation to be populist. He adds, even though there is not much to talk about on the expenditure control measures, he opines that Chidambaram has controlled the urge to come out with a gigantic food security Bill and that's a  good sign.

Terming the Budget as pragmatic and a good Budget Venkataraman said it could have been otherwise given the backdrop and the fact that we have election next year and the macro economic scenario is not that great.

He adds another good point was the announcements on DTC and GST.  The allocation of Rs 9,000 cr for GST and also the assurance that DTC will be introduced in the Budget session of Parliament was a positive sign.

Talking on the road ahead for the markets, he believes that markets will be following earning growth now as markets always follow earnings growth barring periods of extreme optimism and pessimism. So FII inflows, earnings growth, monsoon and then elections will be providing cues for the market going ahead.

Commenting on specific announcements, Venkataraman believes that a new chapter for Coal India has begun as Government would encourage power purchase agreement projects.

Further on the infra space he believes that announcement of the formation of a road regulatory authority to address issues such as financial stress, construction risk and contract management in the sector will go a long way to improve road space. Also, Rs 3-lakh crore have been cornered for road construction alone with tax breaks upto 25 lakhs.