A fine balancing act: Vishal Kampani

Says the FM has sent strong signals to global investors and rating agencies about the govt's commitment to adhering to its earlier decisions

By presenting a balanced Budget, Finance Minister Arun Jaitley has sent strong signals to global investors and rating agencies about the government's commitment to adhering to its earlier decisions, foremost of which is the fiscal deficit target.

In its resolve to meet the fiscal deficit target of 3.5 per cent of the gross domestic product, the government is banking on higher taxes on both currently untaxed and taxed luxury goods, tweaking exemptions for higher income brackets, and a voluntary disclosure of income scheme to shoulder the burden, while staying away from additional taxes or increasing service taxes.


Due focus has been given to roads and railways, which received a combined 17 per cent increase in allocation from the previous Budget. In addition, the near 100 per cent increase in allocation for irrigation will be a huge support to the agriculture sector, boosting the rural economy.

Among the slew of policy initiatives, recycling of capital in property and stressed assets were notable.

The proposed amendments to the Sarfaesi Act, to enable the sponsor of an asset reconstruction company to hold up to 100 per cent stake in an ARC and to permit non-institutional investors to invest in securitisation receipts, will help banks clean up their assets to a large extent.

The clarity on dividend distribution tax for Real Estate Investment Trusts (Reits) is a big welcome and now we can truly say the Reits investment opportunity in India is at par with that in global markets.

Vishal Kampani
MD & Head, Institutional Securities Business, JM Financial Services