Market veteran Raamdeo Agrawal is betting on this sector for Budget 2021
When Finance Minister Nirmala Sitharaman presents Budget 2021, she is expected to outline the Indian economy’s post-pandemic recovery plan. The coronavirus crisis wreaked havoc on India’s economy which slipped into recession; millions of Indians lost their jobs.
A lot of expectations are resting on the finance minister’s shoulders and Motilal Oswal Financial Services Co-founder and Chairman, Raamdeo Agrawal, believes she will not disappoint.
“Delhi sets the rules of the game and Mumbai (the financial capital) plays it. I am sure that it won't be disappointing, it will be very good for infrastructure spending and all, but you have got to keep your fingers crossed,” the stock market veteran tells YourStory Founder and CEO, Shradha Sharma.
Like Raamdeo, most experts believe that the infrastructure sector will play a crucial role in the revival of the economy, and are betting on the fact that Nirmala Sitharaman will thus have the sector high up on her agenda. Rating agency, CARE, expects the Narendra Modi government to increase its spending in key infrastructure areas such as road, power, railways, ports and agriculture. Capital expenditure for 2021-22 is expected to be around Rs 5 lakh crore, compared to the targeted Rs 4.1 lakh crore last year (an additional Rs 25,000 crore was announced under the Aatmanirbhar schemes), according to the rating agency.
How much the government invests and the “quality of the investment” will determine how fast India is able to bounce back from the economic slump it finds itself in, opines Raamdeo.
“It is very important what happens on February 1, and my sense is that it will be a very pro infra oriented budget to kick start the economy. [sic] I mean post- COVID, they have to restart the economy, they have to invest in the economy,” says the veteran investor.
According to global forecasting firm, Oxford Economics, India spends around 4 per cent of its GDP on infrastructure and needs to spend at least 1.5 per cent more annually to meet United Nation’s global sustainable development goals.