Budget View - AK Sridhar - CIO IndiaFirst Life Insurance

"Market players were expecting a little more focus and clarity on what the key agenda for the revival of economic growth and bank capitalization. The Budget was a little disappointment in that sense. The good move is - giving a 'statutory status' to AADHAR. This would benefit the economy in the medium to long run. It will bring about a fundamental shift in which subsidies are given and the monitoring of tax compliance. In the long run it is great way to reduce subsidy outflow, increase tax collection, reduce fiscal deficit and the interest rates and bring about higher growth. Provisions such as higher dividend tax, and lower than market expectation of funds allocated for bank capitalization is a little disappointment. Having said that, Country s growth is not just about what is done one Union Budget. Yearly Budget can only be a drop in the ocean of factors that governs economic growth. I would look at factors like

1) How many kilometer of roads getting laid,
2) What the railways do for expanding its operations & spends
3) How well the Government ensure the contacts enforceability and speedy judgments delivery and
4) above all, on how the Government will collect all the tax dues from every entity that is supposed to declare their income & pay taxes.

As the interpretations of the Budget keep unfolding over the next few weeks, let's not forget to keep a watch on all those four key factors which will give an indication for a medium to long term economic growth for our country"

Source : Equity Bulls

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