Rakesh Jhunjhunwala
Rakesh Jhunjhunwala remains bullish on India as he feels tax collections are going through the roof and the country is on the verge of a big change, but the ace investor does not seem to share a similar enthusiasm for startups as he sought to distance himself from the current excitement surrounding young tech companies.
“I can bet on that net tax revenue in current year is Rs 3-4 lakh crore higher than budget expectations for the rest of financial year 2021-22. Hence, fiscal deficit will be 1-1.5 percent lower than budget estimates. This clearly indicates that next year collection will be higher than Rs 4 lakh crore, so this is ultra conservative estimates of tax collections,” he said in an interview to CNBC-TV18 after the Union Budget.
The gross tax revenue to Centre for April-December FY22 was Rs 19.29 lakh crore and net tax revenue was Rs 14.74 lakh crore.
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The government has revised FY22 gross tax revenue estimates to Rs 25.16 lakh crore and net tax revenue projections to Rs 17.65 lakh crore. FY23 gross tax collection estimate is Rs 27.58 lakh crore and net to Centre is Rs 19.35 lakh crore.
Fiscal deficit is projected at 6.9 percent of GDP in current fiscal and 6.4 percent for FY23.
India is expected to grow 9.2 percent in the current fiscal, and targets capex of Rs 7.5 lakh crore for FY23, up 35 percent compared to previous year.
Jhunjhunwala, who is bullish on India as usual, believes the market will do well. “We are missing the woods for the trees. The government’s focus on tax rules change is coming to the fore now. They are looking at 8-8.5 percent GDP growth; it will be 8 percent and will go to 10 percent,” he explained.
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Further, he said, “The world wants to invest in India. India is a fair and well-regulated tax regime, having ease of doing business. China+1 factor is yet to play in a big way. We have credit cycles that passed us, we have a capex cycle ahead of us. One needs to look at Kumar Mangalam Birla, Adani, Mukesh Ambani who all are saying they will invest big time.” Hence, he feels private capex is going to exceed government expenditure.
“In spite of states elections, the government has not made any welfare expenses or populist measures. So we are lucky to be invested now and I am bullish on the market and economy,” added Jhunjhunwala.
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In the beginning of her budget speech, Finance Minister Nirmala Sitharaman said, “Drawing wisdom from our ancient texts, we continue on the path to progress. The proposals in this budget, while continuing with our declared policy of stable and predictable tax regime, intend to bring more reforms that will take ahead our vision to establish a trustworthy tax regime. This will further simplify the tax system, promote voluntary compliance by taxpayers, and reduce litigation.”
Market positioning
India is on the verge of a big change, Jhunjhunwala believes. “Ease of doing business, privatisation, good and fair tax regime, cutting of bureaucracy clips, which all are indicating we are getting there. Improvement is a process, which has been a happening journey now.”
Also read – FM announces changes to indirect tax regime; more duty concessions bring cheer
Stocks to invest
Jhunjhunwala feels public sector banks are going to really do well as valuations are ridiculous now. “What you buy is more important and at what valuations you are buying is more important. Stock prices are always slave of earnings and cash flow.”
Startup valuations
“I don’t want to go to the startups’ party as hangover is only two days. I think in case of the cryptocurrency space, the government wants RBI to promote crypto currencies like what China is doing,” said Jhunjhunwala.
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