)
"
The total Budget expenditure will hit Rs 16.65 lakh crore in the fiscal that begins on April 1, Chidambaram said that despite expectations for cuts from current year levels, which are on track to hit Rs 14.3 lakh crore, or 96% of the Budget target.
Here is what the experts have to say:
RADHIKA RAO, ECONOMIST, DBS, SINGAPORE:
"Prima facie, it's positive for sentiment that FY13 fiscal deficit target has not only been met, but also undershot marginally, a first in many years.
Also the move to encourage more inflows and higher participation in the capital markets is a plus. The budget could be termed as neutral to mildly positive for fiscal consolidation efforts.
We are not surprised that the subsidies have not been rationalised in any significant manner, especially ahead of the general elections and need to maintain the flagship food security bill.
On the revenue mobilisation end, there is notable increase in tax rates for higher earners, alongside certain luxury categories.
Overall we are a bit sceptical on reaching the FY14 target at 4.8% with the assumed increase in plan expenditure."
SUJAN HAJRA, CHIEF ECONOMIST, ANAND RATHI, MUMBAI
"This is a big picture budget making the best out of a bad situation. The direct priorities seem to be reining in the fiscal deficit and avoiding populist measures.
The outlays on the two main welfare schemes, cash transfer and food security are lower than expected. The fiscal deficit numbers look doable. The higher market borrowing shows that the Finance Minister has been pretty realistic."
SHUBHADA RAO, CHIEF ECONOMIST, YES BANK, MUMBAI
"Overall, it is a good budget. It has taken small steps to address infrastructure bottlenecks, stalled investments and fuel supply issues, and these are the measures we need to focus on.
"We are unlikely to see a very strong inflationary trend because of the proposed tax structure. Coming out of a difficult year, it is not an over ambitious budget, and it is do-able."
RUPA REGE NITSURE, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI
"The finance minister has painted a very encouraging macro picture but with a 30% growth in planned expenditure it would be extremely challenging to contain the fiscal deficit at 4.8%.
"Prima-facie the budget has addressed most of the sectors under stress such as infrastructure, capital goods, housing, etcetera, but how these measures are actually implemented and the resultant outcome will depend on the evolving growth-inflation dynamics.
"The high gross borrowing and the higher spending is going to be inflationary and RBI would rather think of slowing the pace of monetary easing rather than increasing it."
A. PRASANNA, ECONOMIST, ICICI SECURITIES PRIMARY DEALERSHIP, MUMBAI
"The gross borrowing is higher than market's highest expectation. The assumption on growth and tax numbers does look a bit difficult to achieve. But the government has shown resolve and if the tax revenues are lower, the government can ultimately cut spending like it did for this year."
ASHISH VAIDYA, HEAD OF TRADING, UBS, MUMBAI
"The bond market reaction could have been subdued if they knew about the Rs 50,000 crore of buyback. Immediately, the yields are likely to recoup marginally, but eventually the gross supply will hit. I expect the 10-year yield to be around 7.80-7.90% before the RBI policy. Prima facie, looking at the budget, it seems unlikely that the RBI will cut rates in March."
NAGARAJ KULKARNI, SOUTH ASIA SENIOR RATES STRATEGIST, STANDARD CHARTERED BANK, SINGAPORE
"The market borrowing numbers are higher than our estimates, and it is negative for the market. There will be upward pressure on yields. However, interest rate cuts by the Reserve Bank of India need not be related to market borrowing. They will focus on the quality of the fiscal consolidation."
SHAKTI SATAPATHY, FIXED INCOME STRATEGIST, AK CAPITAL, MUMBAI
"Total expenditure for FY14 is higher than revised estimate for the current fiscal year. Fiscal prudence would now be dependent on the quality checks on the non-plan expenditure side, especially the subsidy front."
SACHIN SANDHIR, MANAGING DIRECTOR, RICS - SOUTH ASIA
The budgetary announcements this year translate to a loud and clear message for real estate and construction sector. The government has recognized the importance of funding infrastructure through sufficient government allocation to schemes and encouraging foreign investment. The FM has also not disappointed home buyers by increasing the home loan exemption limit and providing Rs 1 lakh interest benefit for loans up to Rs 25 lakh, which will make homes more affordable.
The FM’s message for improving the ease of doing business in India is appreciated; following international best practices for FII & FDI and also improving policy communication to remove distrust and fear among investors - all of which are critical if India wants to attract foreign investment. This message has significant implications for the real estate sector given the crying need for introducing standards and professionalism as well as reducing timelines & transaction costs for project approvals, in order to build confidence in international investors.
SHINJINI KUMAR, DIRECTOR, TAX & REGULATORY SERVICES, BANKING REGULATIONS, PWC
It is true that the financial empowerment of women has multiplier effect on the well-being of families and therefore, of the economy. It may also be true that an 'all women' bank will have significantly greater capacity to fast forward this financial access and empowerment. In the context of India's huge burden of poverty, this is a desirable goal and I wish it luck. However, at a more philosophical level, it is hard to support the idea of gender bias, even if it is against men.
RAJASHREE NAMBIAR, GENERAL MANAGER - RETAIL BANKING PRODUCTS & SEGMENTS, INDIA & SOUTH ASIA, STANDARD CHARTERED BANK
This is a very pleasant and welcome announcement. I see all positives: firstly, an excellent lever to draw in more women into the organised workforce. More customised and well thought through product offerings to attract/promote women entrepreneurs. Women staff would be more responsive and that should reflect in better customer service levels. And lastly, I am confident that an all women management structure will surely promote a superior culture of ethics and integrity. All in all, a great move and it is for us to leverage the idea well.
INDRANEEL R CHAUDHURY, EXECUTIVE DIRECTOR PWC, INDIA
The Budget looks positive for the housing sector, especially for first time owners. Infrastructure companies will also benefit. The emphasis on the importance of FDI in the Indian economy is welcome. The focus is on increasing the tax to GDP ratio by enhancing collections through direct taxes.
To bring about transformational change in the tax structure, the Finance Minister has ensured that the Direct Taxes Code Bill and the introduction of the Goods and Services Tax are back on track. Overall, the Budget should meet its objectives of reigning in revenue and fiscal deficit and enhancing growth. Hopefully there are no retrospective amendments in the fine print.
DEEPAK KAPOOR, CHAIRMAN, PWC INDIA
This budget is clearly a response to the prevailing socio-economic circumstances in the country. The Finance Minister has put forward a peoples’ budget. The most reassuring aspect of the budget today is the Finance Minister's acknowledgement of the criticality of continued inflow of foreign investments for augmenting the country's growth. The focus is clearly on the imperative of maintaining a healthy environment to mobilise it. The Finance Minister has also done well to place continued emphasis on the infrastructure sector, particularly, social infrastructure, which is really the need of the hour.
