Page 52 - Banking Finance March 2023

BUDGET REACTION

Gaurav VK Singhvi, Co-Founder of We Founder Circle
"For any startup to grow smoothly, easier compliance plays a major role. A lot of decisions of the
entrepreneurs and investors depend on the same. In this budget, more than 39,000 compliances
have been reduced and more than 3,400 legal provisions have been decriminalized, indicating that
even the government sees the startup ecosystem contributing greatly to the future of India.
Simultaneously, investors have remained enticed by the agriculture sector in India, and always
encourage any innovation that offers support to the largest industry. The announcement of the Agri
Gaurav VK Singhvi
Accelerator Fund by the government will not only encourage entrepreneurs but also strengthen the
agri supply chain which has been struggling for way too long. We have been bullish and investing in Agri startups and
have 3 companies in our portfolio, I believe this initiative by the government will see a boost across the entire value
chain in the agriculture industry and we definitely see a lot of startups emerging and potentially becoming unicorns from
the Agri startup community.
Carrying forward Digital India, and the now renowned IndiaStack or BharatStack of digital solutions for financial inclusion,
compliances, governance, and public services, the Honorable FM has announced the launch of various other digital
programs such as a digital platform for agriculture, Digital National Library, AI Center for Excellence, extension of eCourts,
Unified Skill India Digital Platform, Tourism App, Central Financial Data Repository, Unified Filling Platform, thrust on
BharatStack viz. Digilocker, Video KYC, etc.
This is commendable and takes India higher in the tech space. Especially, the unified filling platform, if done properly,
can simplify the multiple compliances that companies have to currently do for various regulations through a common
digital filling of data/forms."

Mahendra Jajoo, CIO fixed income, Mirae Asset Investment
Managers

This budget focuses on long term vision, structural reforms and infrastructure and social development.
Highest ever capital expenditure of 10tn, on a already high base of last year, is a very encouraging
signal for continued positive momentum in Indian economy. Theme of inclusive development and
empowerment of women and weaker sections of society would also further strengthen ongoing trend Mahendra Jajoo
of widening participation by all sections in countries growing prosperity. On Fiscal front, net borrowings
projected at INR 11.8tn works to 5.9% of GDP which is a huge improvement on 6.4% last fiscal. Further, finance minister
reiterated the commitment to bring the deficit below 4.5% by FY 2025-26. With nominal GDP growth projected at 10.3%
and inflation expected to continue easing in coming months, interested rates are expected to stabilize around current
levels. A strong budget will also comfort the MPC on supply side management of inflation, growth momentum and fiscal
stability which may in turn provide some elbow room for accommodative stance at the margin.
We expect MPC to shift to a pause mood along side other major global central banks by Q2CY23 even as there may still
be some rate hike left. Long term rates may already have peaked in current cycle and may stabilize around current
range for the time being. Encouraged by in-line borrowing schedule for FY 23-24 and the analysis that nearly 65% of the
fiscal deficit is for capital expenditure, bond yields eased by 5-8 bps during the day. Benchmark 10Y govt bond yield was
last trading at 7.29%, down 5 bps for the day.

RBI surveys foresee overall improvement in economy

The Reserve Bank of India's forward-looking surveys present an overall uptick in the economy. While the survey of 40
professional forecasters on macroeconomic indicators placed GDP growth forecasts in the range of 6.6-7.2 per cent
for 2022-23, a Services and Infrastructure Outlook Survey indicated improvement in the overall business situation with
respondents, especially optimistic on employment and availability of finance. Another survey that measures consumer
confidence stated that the index improved further both for the current period and for the year ahead with the cur-
rent situation index (CSI) continuing on its recovery path for the ninth survey round since the historic low recorded in
mid-2021; it increased by 1.3 points in January 2023.

46 | 2023 | MARCH | BANKING FINANCE