Do you think this Budget is going to move the needle for the market or for any individual pockets of stocks in a sizable manner?
The market has moved very strongly, particularly in the last one or two months and it has been well ahead of global markets. In that context, the ability of the Budget to give a boost at an aggregate level to the market is going to be a little bit of a challenge. Could there be some risks that lie with the Budget from a market perspective? It is possible. Risks will depend on the fact that the government is keen on consolidating its fiscal deficit and that could translate into some kind of taxes that effectively come through. People in a bull market tend to forget a lot of the risks. That could be a little bit of an equalisation factor that fundamentally tends to come through.
And the third bit would be if the government gives incentives — be it real estate where some fiscal incentives have come through or auto where lower rates have propelled demand and thereby revenues. In some places it takes an approach which is lower taxes or provides more incentives to get growth. The economic logic of lower prices, incentives to drive broader growth have played out very well over the last three to six months and it will be more tempting than it has been in the past for the government.
budget 2021: Taxes only threat to market from Budget perspective: Aditya Narain, Edelweiss
The economic logic of lower prices, incentives to drive broader growth have played out very well over the last three to six months and it will be more tempting than it has been in the past for the government to raise taxes, says Aditya Narain, Head of Research, Edelweiss Securities.
