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We believe that the government will continue to focus on the real estate sector & the economic reforms as much remains to be done on all these fronts.
Jyoti Roy, DVP Equity Strategist, Angel Broking Ltd, said in an interview with Kshitij Anand of Moneycontrol that the government should introduce more policies to revive the real estate sector, given that it is one of the largest job generators in the economy.
Modified excerpts:
Q) What are your budget expectations? With estimates of growth in the south, do you think the budget will help the real estate sector?
A) Given a very low rate of growth, this budget will be extremely important and the government must make it important. We believe that the government should focus on fiscal expansion rather than consolidation, given the extremely low growth rates.
The sharp rise in overall inflation to 7.35 percent in December is mainly due to food prices, which have to be normalized at some point. We believe that the government will continue to focus on the real estate sector & the economic reforms, as much remains to be done on all these fronts.
We believe that there is a high probability that the government will also be able to reduce the fiscal deficit target for fiscal year 21.
Q) Do you think that the government will achieve the goal of the fiscal deficit? How comfortable will the market feel?
A) Given very low growth rates, we believe some financial slowdown is necessary and will be beneficial to the economy. We believe that the markets will not be very concerned about the target fiscal deficit decreasing by 20-30 basis points for fiscal year 21. In addition, if necessary, the Reserve Bank of India (RBI) could intervene to absorb the excess supply of government bonds through non-monetary measures As traditional as OMO or process operation.
Due to excess liquidity in a system over Rs 2.5 crore lakh. RBI may prefer to buy securities with longer dates in the market, while at the same time, it sells securities with shorter dates to lower long-term interest rates rather than perform OMOs.
Q) Is the real estate sector are likely to attract attention in the budget and why?
A) We believe that sectors such as the real estate sector & economic reforms estimated consumption and manufacturing will attract attention in this ITU budget. The government has clearly demonstrated its focus on the infrastructure sector by announcing plans to invest 100 non-existent rupees. For the next five years.
We hope the government will introduce more policies to revive the real estate sector, given that it is one of the largest employment generators in the economy.
There are also expectations that the government can play personal tax rates in the budget, either by lowering tax rates or raising exemption limits, which puts more disposable income in the hands of taxpayers and will benefit the discretionary consumer sector.
The government can also increase import tariffs on specific items to encourage domestic manufacturing, which would be beneficial to the manufacturing sector.