Budget 2021 | FM has given a Budget better than market expectations: IIFL Wealth Management Senior Partner

The Finance Minister has given a budget which was better than market expectations. In line with the stated priority of the government, the budget focusses on increased thrust to infrastructure and other supply side measures to accelerate manufacturing in the country. There were no major changes on the direct tax code which was taken very positively by the market though the lack of any demand side push was a disappointment.

The government has also not been constrained by the fiscal numbers and has focussed on spending to get the economy back to it’s feet folowing the pandemic's devastation. As always, the key will be execution of the plan. The divestment number will need a lot of work. The additional borrowing needs to be managed by RBI proactively to ensure that it does not impact the long term rates significantly.