India's Budget 2017 - Quick Observations

Being part of more than 10 Fund house discussions on India's Budget 2017 conducted by the Head of Equities, Head of Fixed Income, Economists, CIOs and exclusive discussion with Kenneth Andrade throws some quick observations from my side. 

1. ‘No significant disruptive’ measures taken by Finance Minister and no “big-bang” reforms.

2. Small loopholes have been plugged like the set-off losses from house property. 

3. Considering GST implementation in few months, major tax overhaul was not done. 

4. Infrastructure, agriculture, and digitalization remained at the forefront.

5. Changes in banking sector such as NPA provisioning, interest income consideration, and re-capitalization not a big impact on the sector. 

6. The fiscal deficit and gross market borrowing estimates are not going to significantly impact the Debt Market. Liquidity conditions are expected to remain positive. 

7. Yields may get negatively affected by factors outside India i.e. global turmoil, Trump policies, oil prices etc. 

8. On the Equity market side, most of the sectors are going to impact positively. Mixed impact can be seen in the Real Estate sector. Amongst other, the front runners are FMCG, Cement and Capital Goods.

9. On the Commodities side Gold demand will take a hit on account of no-cash transactions above Rs. 3 Lakh and ceteris paribus, the currency should remain stable.

- Equity Investment 'should be done' in a staggered way. Buy on fall. 

- Short Term yields have come down. Invest in 2-3 years duration funds. Accrual too should be good.

*The fund houses remained divided on Long Duration and Short Duration Funds as well as lump-sum and staggered investments.