Budget's silence on NBFC crisis will disappoint markets, says Citrus Advisors

Sanjay Sinha of financial services firm Citrus Advisors discussed the fundamentals of the market, upcoming Union Budget and economy in an interview with CNBC-TV18.

“The two legs on which economic growth is standing are consumption and investment. If we are going to raise the fiscal deficit target and if that is going to go into government consumption, I think that is not going to get us a lot of positive outcome,” he said.

“I think what is important at this point of time is to get the private sector consumption back on track. The monthly numbers which have been coming out from a large number of sectors, the quarterly numbers that have come out from a number of discretionary and the non-discretionary consumption oriented companies also have not painted a rosy picture. Therefore, there would be some limitations in terms of directing enhancement of fiscal deficit outlay to consumption,” he added.

On the upcoming Union Budget, Sinha said: “This Budget is not the Budget for the next eight or nine months, I think this is going to be the roadmap for the next five years of the new government.”

“There should be a lot of discussions on infrastructure roadmap and equally important on what are the resource mobilisation for that infrastructure spending that the government is going to adopt,” he added.

On markets, Sinha said, “Today one of the major worries for the market is the likely contagion effect of the NBFC

“If the budget speech also is absolutely silent on the NBFC crisis and the ways to deal with that, I think that would be one of the issues that could surely disappoint the market,” Sinha added.