Budget seems to be staging point for next year's announcement: Sandesh Kirkire, CEO, Kotak AMC

Sandesh Kirkire, CEO, Kotak AMC shares his views on Budget 2011.

“The policy objective of the present budget seems to be set upon the framework of cushioning growth, inflation curtailment, augmenting social inclusion and enhanced financial transparency & discipline. Additionally, the present budget seems to have been used as a staging point for the next year’s budget announcements, when GST and DTC roll-out may be on cards.

However, the process of fiscal consolidation continues, and the reduction in the fiscal deficit (as percentage to GDP) and the net market borrowing has come as an evident relief for the debt market.

In specific announcements for the Indian mutual funds industry, the dividend distribution tax on debt schemes has been enhanced to 30% plus surcharge. This will eliminate the tax arbitration between debt MFs and alternative debt products. Further, the opening up of the equity mutual funds schemes to direct foreign investors may bring in greater flows in the domestic mutual funds”.