This publication has presented a set of views from wealth managers and investment houses.

Credit Suisse Private Banking and Wealth Management

“India’s FY 2016 budget was not very exciting in terms of implications for reforms and medium-term growth. The fiscal deficit target of 3.9 per cent of GDP (versus 4.1 per cent of GDP in FY 2015) could be met but more due to higher-than-expected inflation and downside risks to planned capital expenditure.

"The main conclusion of the budget is that the boost to growth over the next few years is going to be more longer gestation. On a positive note, even though fiscal consolidation is not on the cards for FY 2016 (ending March 2016), we will not experience a repeat of the fiscal blow-ups in FY 2014 and leading up to it one-to-two years before that. Reforms momentum in terms of the actual implementation is likely to be gradual instead of a 'big bang variety'. The FY 2016 GDP growth estimate of 8.5 per cent YoY versus 7.4 per cent YoY in FY 2015 is too optimistic. The estimate for the FY 2016 GDP deflator of 3 per cent YoY is also too optimistic, in our view.

"In a stark change of events, risks from a policy perspective now emanate from the calibration of monetary policy and micro level structural reforms. The worst of fiscal policy-led bouts of macro instability are over. Having said this, the medium-term fiscal targets are too optimistic. Note that over the last five-to-ten years, fiscal policy had been a major source of periods of macroeconomic instability in India. The current administration, in our view, will at least be able to stabilise fiscal conditions.

"The medium-term fiscal targets are too optimistic though, particularly on the revenue deficit dropping to 2 per cent of GDP in FY 2018 from 2.9 per cent of GDP in FY 2015. At best, we are likely to observe a print of around 2.4 per cent of GDP in FY 2018."

Teera Chanpongsang, portfolio manager of the Fidelity South East Asia Fund

"The budget is in line with the government’s policy direction – a direction that has been consistent since Modi was elected. Overall, I think it was a good budget as the government has made it clear that they need to stimulate infrastructure spending, evidenced by a 33 per cent increase in infrastructure spending, the establishment of a national infrastructure fund, and revisiting the Public Private Partnership framework. Additionally, the clarification of the General Anti-Avoidance Rules and the planned introduction of GST are positive developments. A key message is that the government is focusing on economic growth whilst maintaining fiscal discipline.

“I believe that India is on the path of strong economic growth over the coming years. A recovery in economic growth is expected to be underpinned by improving investment cycles, strong domestic consumption and ‘ease-to-do-business’ government initiatives. I maintain my high conviction in India as there are many high quality companies that are in the position to capture structural changes of economic potential in years to come. Looking forward, India is forecast to post one of the highest GDP growth among Asian countries.”

Mike Sell, head of Asia, Alquity Investment Management
"Given the high expectations, Finance Minister Jaitley was never going to make everyone happy. No budget announcement anywhere in the world ever does. However, he has delivered a pro-growth budget which reinforces our strongly positive view on the Indian economy and stock market (even after the significant move in the latter over the last year).

"India accounts for 20 per cent of our Asian Fund, and our Indian Subcontinent Fund is heavily positioned in pro-growth sectors (rather than software and pharmaceuticals - which has been 'the' story in India over the 20 years I've been investing in the market, but is not the 'next' story).

"Overall, if we were forced to 'score', we would rate the budget 8/10. The highlight of the speech was a 5 per cent reduction in corporate tax rates over the next four years (starting in 12 months’ time), to be funded by reduced exemptions."

Kunal Desai, head of Indian equities at Neptune
"With markets kept open on Saturday, Finance Minister Jaitley delivered a promising budget focused on growth and decentralisation. Whilst many complained about a six-day working week, there was much to be pleased about and the markets rallied in the afternoon to finish firmly in the green.

"We had highlighted the once-in-a-generation opportunity for the government to redirect fiscal spending away from unproductive subsidies, towards a growth-enhancing infrastructure push given the drop in oil prices. We saw good evidence of this, with annual capex spend up 25 per cent - including the doubling of road spending and rail investment up 30 per cent.

"Meanwhile, subsidies were reduced, with total spend amounting to 1.7 per cent of GDP versus 2.1 per cent last year (this is the lowest level in eight years). The government relaxed its fiscal targets – plumping for a 3 per cent fiscal deficit target in three years rather than two – in order to stimulate growth through enhanced spending. Further, corporate tax will be lowered to 25 per cent from 30 per cent over a four-year period. With the government focusing on 'cooperative federalism' through increased involvement from the various states, revenue share to the states was increased by 1 per cent of GDP.

"Some may be initially disappointed that bolder steps were not taken and a greater mix-shift away from subsidy spending to infrastructure would have been welcomed. However, that would have come at a greater political cost – something the BJP are carefully trying to manage. So-called 'big bang' reforms were unlikely to be introduced during the budget session. The finance minister was keen to highlight that the budget day represents just a single day out of a full year when reformist steps can be taken. Indeed, we believe that this is one of the most attractive features of the Indian market: the reform agenda is being characterised by a constant drip of reformist action rather than short periods of hyperactivity."