Sridhar Sivaram, investment director at Enam Holdings is a bit disappointed that the budget did not announce more spends on the rural schemes but said that it is an annual event and just a financial budgeting numbers that are announced.
He said, "We have seen with this government - many of the bigger policy announcements have come outside the budget. So a lot of people are disappointed and many sectors felt as if nothing got announced but if they were expecting all reforms to be announced in one budget, there are more speeches to come.
“I would have expected the government at least spent a bit more on the rural schemes which they have done quite well be it the Pradhan Mantri Gram Sadak Yojana (PMGSY), Pradhan Mantri Awas Yojana (PMAY) or even Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Many of the allocations for rural programmes have been at best flat or marginally down. I would have expected that they would increase the allocation for many of these," he said, adding that the government’s defence is if there is more demand, we will provide.
From a market perspective, he said the house is positive on the broader market than just the ten stocks that have taken the market up for the last year or so. With the broader market valuations having substantially come down, the opportunity to invest is there if there is a greenshoot, he said in an interview with CNBC-TV18.
“Broadly we are working with the theory that the growth will come back but it is not going to be the roaring growth of 7-8 percent. I would doubt even if the 6 percent number comes. However one should keep in mind that we were at 4.5 percent and possibly even the current quarter may not be that great. So from there, the expectation for the next year definitely looks much better.”
According to him, this is a great period for banks where competition is less. Upbeat on the banking sector in general, he said, “I would just sit on many of them right through this period of the next 18 months where they could surprise the markets on the upside.”
Talking about the new tax regime announced in the budget, he said, the way to look at this is not how much tax you save but the fact that if you are not going to invest Rs 50000, which you earlier had to invest, it would be that much extra money in the hand to spend, and this could help boost consumption. So, any urban consumption related themes will be a beneficiary of this. People are currently underestimating the impact, he added.
Speaking about auto sector, Sridhar said, “I am not sure if the government is in any position to reduce goods and services tax (GST) at this stage given the way the GST collections have been. So the industry will have to brace through this transition with possibly some reduction in the margins and move forward. If at all there is a GST cut, it will be only possibly 12 months from now if and when the GST collection stabilise.”