Money9 Budget Conclave: Experts laud government’s infra push

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The infrastructure sector was the talking point of Budget 2021. As the Union Finance Minister said after the budget, the government ‘spent, spent and spent’.

At the Money9 Budget Conclave in a panel discussion moderated by Priyanka Sambhav, Sunil Subramaniam, Managing Director at Sundaram Asset Management Company Limited and Lakshmi Iyer, CIO(Debt) & Head Products, Kotak Mutual Fund, shared their views on the government’s spending plan for the sector.

Asked to rate the budget, Subramaniam said: “I am very happy with the budget. It has transparency and pragmatism. The budget was presented in Covid times when things have been bad. The government has acknowledged fiscal deficit at 9.5%, but despite that, there is no decrease in spending, especially quality of expenditure taken by the government.”

One of the biggest concerns has been economic growth and employment in the country. Talking about it, Subramaniam said: “The government took the right step by focusing on infrastructure and banking. Despite paucity of funds, money has been spent well on all sectors well. This will ensure employment generation. This is why markets gave the budget a thumbs up.”

Iyer labelled the budget ‘pragmatic’ for its spending in the right places.

“Many expected change in taxes, but that did not happen. It has left a positive atmosphere. Capital expenditure has been increased. FCI and Fertiliser bonds have been taken into the balance sheet, which is why fiscal is high. So it should not be much of a worry,” she said.

So, is the focus towards debt fund the right approach?

It is in the right direction. If you talk about capital markets, there is a need for long-term bonds. As of now, there is appetite for short and medium duration bonds,” she said.