The splendid recovery in the markets in the last two days following the drastic fall on Budget eve has brought some comfort for retail investors. However, uncertainty still lingers, with global markets still teetering and the government’s ability to achieve the revenue target being a matter of debate. Sunil Subramaniam, CEO, Sundaram Mutual Fund, spoke to BusinessLine on the Budget and the way ahead. Excerpts:
How do you see the Budget?
The Budget has given a lot of clarity. It has shown that the government has no political ego. They have continued with some of the UPA government’s decisions, be it MGNREGA or Aadhaar card. They knew that the world scenario is not conducive for growth. It is not the time to borrow more and make India a risky country. It gives great comfort to foreign investors that this government is continuing with the fiscal discipline commitment given by Chidambaram (former Finance Minister) in FRBM (Fiscal Responsibility and Budget Management).
What is there in it for the mutual fund industry?
The certainty of policy will help the industry take a long-term view on investments and look at sectors that will benefit from the Budget proposals. If there is an uncertain environment we also have to be more short-term in our approach. Exempting distributors earning less than Rs. 10 lakh a year from service tax is good. It is a huge saving of 14 per cent for distributors. They have exempted capital gains on merger of two options within a scheme. It will give a boost to merger of common options within schemes and lead to consolidation.
