Budget FY 22 is a welcome budget reemphasising focus on Atamnirbhar Bharat, aimed at an accelerated revival of economy still recovering from covid shock. In line with indications earlier, with covid situation having improved significantly, Govt has provided major fiscal stimulus to industries, infrastructure and rural sector alike, with a bold decision to opt for higher market borrowing rather than increasing direct taxes. This will provide a “double engine” tailwind to economy with spending power remaining intact and with further support from govt stimulus. Structural reforms, focus on healthcare, liberalization in insurance FDI, setting up ARC for bad debts are other significant features. Higher borrowings may initially be somewhat concerning for debt markets but with inflation having eased in recent months and with RBI likely to remain supportive, bond markets should stabilize shortly with a minor uptick in market yields.
-Mahendra Jajoo , CIO – Fixed Income Mirae Asset Investmet Managers (India) Pvt Ltd .