George Heber Joseph is the CEO/CIO at ITI Mutual Fund
Like most of his ilk, George Heber Joseph, CEO and CIO at ITI Mutual Fund, was surprised by the announcement about the introduction of Digital Rupee and taxing of digital assets. It was a welcome move, he says.
Capital goods, engineering, infrastructure, cement, logistics and banking are clear beneficiaries from the Union Budget 2022, thinks George Heber Joseph, CEO and CIO at ITI Mutual Fund.
“Higher capex would result in better order book growth for capital goods and infra companies and system loan growth would also improve,” the seasoned mutual fund industry professional shares in an interaction with Moneycontrol. Excerpts from the interaction:
How would you rate the Union Budget? Do you think the Budget has met your expectations?
I would rate this Budget an eight on 10. It is growth-oriented, with large increase in capex, and the fiscal deficit targets are realistic. Also, the focus on increasing the share of manufacturing in the economy continues with measures such as emphasis on PLI (production linked incentive) schemes and higher domestic sourcing in the defence expenditure.
Click Here To Read All Budget Related News
Despite the upcoming state elections, the Budget was not made a populist one. Tax rates are stable which is also a positive from the stability point of view. There is a clear focus on the start-up ecosystem and also on the clean energy and sustainable development.
Do you call this a growth-oriented Budget and do you think the government has done a fine balancing act?
Definitely it’s a pro-growth Budget and the focus is on long-term sustainable growth. Increase in allocation to capital expenditure to Rs 7.50 lakh crore or 2.9 percent of the GDP is very positive. The government clearly recognises that it will have to take a lead in capex and private sector capex will follow.
Also read – Finance Minister Exclusive: Nirmala Sitharaman On Government’s Growth Vision Under Budget 2022
Also, the government is focused on the new trends with focus on digital and clean and green energy. Inclusion of Data centres and energy storage systems as infrastructure is a positive. Government continues to encourage start up ecosystem and domestic manufacturing, with the favourable tax regime extended by a year. Also the emphasis on Gatishakti and improving the logistic chain would help domestic manufacturing.
What are the most surprising announcements made by the finance minister in her Budget speech?
Introduction of Digital Rupee and taxing of virtual digital assets are welcome surprise moves.
Also read – Crypto finds space in Budget 2022; here’s what the industry thinks
Have you seen any negative announcements in the Budget speech?
The finance minister did not mention how the government is dealing with high oil prices as the oil subsidy is projected to decline to Rs 5,813 crore next year. Does it mean more deregulation? Also, allocation to MNREGA is projected to decline from Rs 98,000 crore in the current year to Rs 73,000 crore next year. This is at a time when rural demand is still weak.
Also read – The big positives and one vital negative in Budget 2022
Especially after the Budget, what are the sectors to bet on or sectors that one must have in portfolio?
I think capital goods, engineering, infrastructure, cement, logistics and banking are clear beneficiaries. Higher capex would result in better order book growth for capital goods and infra companies and system loan growth would also improve.
Focus on affordable housing will benefit housing finance companies and cement. The pipe companies will benefit from higher allocation to the ‘Nal se Jal’ scheme. Also, a rising interest scenario benefits banks as competition from debt markets reduces and banks with high CASA see improved spreads.
Do you think this Budget has put a clear roadmap for India to achieve $ 5 trillion target by 2024-25?
This Budget is continuation of the economic road map drawn by this government and in that sense we remain on the track.
Are you happy with the government’s divestment programme set in the Budget 2022?
The divestment targets have been reduced for both FY22 and FY23. But these appear more realistic.
As per your reading, what are the missing factors that the government should have done in the Budget 2022?
The lower income groups, both in urban and rural India have faced the brunt of the COVID-related lockdowns. This has been reflected in weaker consumption demand from these segments. The Budget does not have any measures to improve their income levels.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
