Udayan Mukherjee of CNBC-TV18 on Monday said that the report prepared by the Bimal Jalan committee on RBI's excess capital should be seen as a bigger hope compared to the upcoming Union Budget for the economy, as well as the market.
“Whether the government chooses to use that excess capital, if it gets it, to recapitalise public sector banks or in the Budget, the finance minister says I am going to get so much from the RBI and therefore, I am going to put to using the infrastructure route... both the routes have their own pros and cons, but I think that (RBI capital) is the biggest source of stimulus that the economy can get,” said Mukherjee.
Mukherjee expects that the excess RBI capital could be a source of some near-term support for the economy and therefore, for sentiment in the market.
Talking about the auto sector, Mukherjee said,” The news flow is not improving on the margin. All of us know that this sector has underperformed for a very long time now.”
“When a sector goes through a prolonged down phase like this, a lot of people feel it is time to accumulate the blue chips out here and eventually as the market or economy turns around, you will get a good ride up in some of the auto names,” he added.