Union Budget 2015 India Predictions: Weak economy; lofty expectations, says Sharekhan

Union Budget 2015-16: Time for government to walk the talk and take concrete steps to revitalise the economy by productive allocation of windfall gains from lower subsidy bill (savings of Rs 1.2-1.5 trillion in fuel and fertiliser subsidy due to plunge in prices of crude oil and other commodities)

Importance of budget stems from the fact that economic recovery and corporate results in Q3 were weak Low utilisation in the manufacturing sector with little uptick in demand (rural consumption moderating due to unfavourable monsoon and limited hike in support prices; urban demand looking up but still early days); so private industrial capex/investment may take longer Hence, onus to revive investment cycle rests on the government through increased capital spending on infra projects

Savings in subsidies (of Rs 1.2-1.5 trillion) provides enough legroom for the government to increase public expenditure on infra projects, namely roads, railways, low-cost housing and defence.

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