Welcome to our brand new BETA version...

EXPERT VIEWS ON THE BUDGET 2019

The 2019 general budget ended up as just another event without any big bang announcement to drive the economic engine as was widely expected.


Continuing with the borrowing target set up in the interim budget, the Government intends to tread on path of fiscal prudence with deficit of 3% targeted to be reached by FY21 & FY22, thus fortifying the economic health along with building up confidence of international investors in long run.


Taking the cues from the Economic survey presented, the FM has taken a bold step of diversifying the debt on the books by raising the share of sovereign external debt in external currencies which has primarily cheered the debt market as it would help reduce crowding out of the private borrowing and help reduce cost of funds, the much needed helpline for India Inc. in these days of tight liquidity in the debt markets. The 10 year bond yields have dropped around 6.69% post the announcement of raising the government borrowings through sovereign bond route.


Building on the cues from the Economic Survey, the FM has laid down stress on the economy driven by virtuous cycle of investment to reach the coveted $5 trillion mark over next 5 years. Infrastructure investments in transportation, housing, improving ease of living and industrial developments would kick start the economic engine. Additional resources (beyond budget allocation) required for infrastructure creation would be made available through re-cycling of the existing assets as pointed out in the Economic Survey report.


FM has asked SEBI to consider raising the minimum public shareholding from current threshold of 25% to 35% in the listed companies; this would lead to offloading of promoter stake as and when the regulation is announced. This development will have an overhang for the companies with over 65% promoter shareholding leading to price volatility.


Overall, the budget has become just another event in the slew of measures to be taken by the government to re-ignite the economic engine and lot more things are likely to happen outside the budget as time passes.