Budget 2021: All eyes on how RBI will manage borrowing program, says Kotak Mahindra’s Nilesh Shah

In an interview to CNBC-TV18, Nilesh Shah, MD & CEO of Envision Capital and Nilesh Shah, MD of Kotak Mahindra Asset Management reacted to Finance Minister Nirmala Sitharaman’s Union Budget 2021.

Nilesh Shah of Kotak Mahindra said, “This budget has been fairly stimulative and more importantly I really appreciate the way government has committed to asset monetisation. There are range of instruments available for asset monetisation from roads, to warehouses, to transmission lines, to either assets of the government and this all resources are being reinvested for creating further assets. So government is not only monetising resources but also reinvesting the same to create a virtuous cycle. So net-net a fairly supportive budget from a growth point of view to equity market.”

“On the debt market side obviously the size of the borrowing is little bit of a concern and hence all eyes will be on RBI on how they will manage this borrowing program,” he added.

While giving his take on budget Nilesh Shah of Envision Capital said, “This is probably one budget over all these years which has actually left the market with a huge positive surprise. The fact that there are no taxes, there is huge initiatives in terms of divestment something which we have not seen for the last 50 years odd in terms of privatising or disinvesting two PSU banks and then making many other positive moves across the board. This is probably one budget where you can’t think of any significant negative.”

On markets Shah said, “There are huge takeaways, huge positives and that is essentially cheering the market and basically giving it an important reason to kind of stage the kind of upmove that we have seen today. On the whole a hugely positive budget and very positive for the markets as a whole purely in terms of sentiment.”

“Fiscal deficit that number of 6.8 percent could be a bit of a worry down the line, but right now that is probably overall, it is not very important and I think it also reflects boldness on the part of the government that this is the need of the hour if you need to stretch on the fiscal deficit side so be it.”

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