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Infrastructure opportunities in India budget, says Allianz BRIC Stars manager Kunal Ghosh

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Kunal Ghosh, manager of the Allianz BRIC Stars fund, says the budget just published by the Indian government points to fiscal discipline but also opportunities in infrastructure.

It was a conservative budget which emphasised growth whilst showcasing fiscal discipline. The budget outlined India’s aims for a 6.5% GDP growth rate (with the current rate at sub 5%), and a fiscal deficit of 4.1%. The budget was particularly promising on infrastructure growth for rail, roads, gas pipelines and power infrastructure.

The budget was also positive for banks especially mortgage focused banks as they will benefit from the increase in the tax deduction limit of housing loans. Elsewhere, the lower tax of 15% from foreign subsidiary to an Indian parent has been extended without any sunset clause. Overall, the budget did not have many ‘wow factors’ but what we liked was the emphasis on details and on rebuilding growth as well as the balance sheet of the country.


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