Budget Reaction 2024-25: Dhawal Dalal, President & CIO-Fixed Income, Edelweiss Mutual Fund

23 Jul 2024 , 02:57 PM

The final Union Budget for FY25 continued on the ongoing theme of continuity while increasing focus on the employment, ease of doing business, tourism and rural infrastructure. While total capital expenditure for FY25 was kept unchanged at Rs. 11.1 trillion, the fiscal deficit for FY25 was reduced to 4.9% from earlier estimate of 5.1%. From the bond market’s perspective, gross borrowing & net borrowing through dated IGB in FY25 is marginally reduced by ~Rs. 12,000 crore to Rs. 14.01T and Rs. 11.63T respectively. This is marginally lower than market expectations. Further, taxation on fixed deposits, debt mutual funds, bonds and Market-linked bonds was kept unchanged. This was a bit damper for fixed income investors. That said, we don’t expect significant change in investor sentiment. Overall, it is a pragmatic Union Budget from the financial market’s perspective.

 

Disclaimer: Mr. Dhawal Dalal is President & Chief Investment Officer – Fixed Income of Edelweiss Asset Management Limited (EAML) and the views expressed above are his own.