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Rate cuts, reforms & pro-growth Budget: Market wishlist for 2015

A growth-oriented budget, passage of reform bills in Parliament, reduction in interest rates and stability in global markets top the wishlist of Dalal Street for the new year 2015.

Driven by robust investor sentiments, impressive foreign fund inflow and formation of a new majority government at the Centre, the stock market benchmark Sensex generated a bumper return of about 30 per cent for investors in 2014.

Analysts said markets are keenly waiting for the Union Budget 2015 to be presented in February. The market entities believe the upcoming budget could be a make or break event as this would be first full budget from new government and hopes are high with Finance Minister Arun Jaitley indicating start of second-generation reforms going forward.

“In our opinion, long-term investors are waiting on fringes with hope to get clarity on issues related to taxation (especially retrospective), GAAR, FDI in various sectors. Any disappointment from Budget can trigger steep correction in markets,” IndiaNivesh Securities’ Research Head Daljeet S Kohli said.

Market experts said the government should ensure smooth functioning of the Budget session and try to pass as many bills as possible because market behaviour will be determined to a large extent by how the budget session steers the way.

Highlighting the market wishlist for 2015, Anand Rathi Financial Services’ Co-Founder and Vice Chairman Pradeep Gupta said: “Intended reforms such as insurance, GST bill need to be passed by the Parliament before the Budget. RBI to begin reduction of interest rates up to 100 bps during 2015.”

“A growth oriented budget stimulating investments in infrastructure and boosting consumption demand to be achieved by enabling ease of doing business and stable tax policies.”

Issues like environment, land, power, coal, mining are to be effectively addressed through administrative and clearance process. This will manifest the impact of relaxed FDI limits in defence, railways and planned increase in insurance, Gupta added.

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