IGI Logo

Below are Quote on Union Budget 2021 By Mr. Jyoti Roy - DVP- Equity Strategist, Angel Broking Ltd

The Union Budget 2021-22 surprised all market participants as there was significant boost provided to Government spending despite the shortfall in tax collections. Overall Government spending for FY2021 has been revised to 34.5 lakh cr. as against Budget estimates of Rs. 30.4 lakh Cr. despite a significant shortfall in tax collections for the year. revenue receipts for the year have been revised to Rs. 15.5 lakh Cr against budget estimates of Rs. 20.2 Lakh cr. Disinvestment proceeds too have been revised sharply down to Rs. 32000 crore from Rs. 2.1 Lakh cr. As a result, the fiscal deficit has been pegged at 9.5% for FY21. The fiscal deficit for FY21 is well above consensus estimates of ~7% as the Government is actually looking to spend more than budgeted despite a shortfall in tax collections. Personal and corporate tax rates have largely been left untouched and the Agriculture cess too has been implemented in a very non disruptive way. Gross borrowing figure at 12.7 Lakh cr is also not significantly higher than revised figure of Rs. 12 lakh cr which will ensure that G Sec yield does not move significantly higher. Overall the Budget is slightly negative for the bond market though it is positive for equities.

Above views are of the author and not of the website kindly read disclaimer