Budget 2014 sets a positive tone for market & economy: Nitin Jain, Edelweiss

NEW DELHI: Stating that Finance Minister Arun Jaitley's budget sets a positive tone for both the market and economy, Nitin Jain, CEO of Capital Markets at Edelweiss said, "The government made its focus points clear and this promises to aid long term sustainable growth for the country."

"Tax pass through for REITs is positive for real estate and possibly financial institutions that have large property holdings as this helps them in monetizing the same," Jain said.

"Infrastructure seems to be the clear focus of the government with special emphasis around connecting India - 8000 kms of roads, airport development (Tier I and Tier II town focus) and creation and enhancement of 16 ports around our coast," he said.

"Innovative steps have been proposed to reduce supply bottlenecks by increasing warehousing infrastructure and restructuring the distribution system hopefully resulting in better control of food inflation," Jain said. "The FM has also listed a few progressive steps to develop the corporate bond and currency market," he added.

"For the investing public, single demat account across assets and unified KYC are long awaited welcome moves," Jain felt. "We were expecting some more capital market reforms around widening and deepening retail investor pool but that was not forthcoming today. Mr. Jaitely has taken a balanced approach though he seems to have wanted to make quite a few stake holders happy," Jain concluded.

Stating that Real Estate Investment Trusts (REITs) have been successfully in several countries, Arun Jaitley on Thursday said, "Government has proposed incentives for REITs which will have pass through for the purpose of taxation."

In his maiden budget speech, Jaitley said, "REITs have been successfully used as instruments for pooling of investments in several countries." "As an innovation, a modified REITs type structure for infrastructure projects is also being announced as Infrastructure Investment Trusts (InvITs) which would have a similar tax efficient pass through status, for PPP and other infrastructure projects," Jaitley said.

"These structures would reduce the pressure on the banking system while also making available fresh equity," he said. Jaitley exuded confidence that these two instruments would attract long term finance from foreign and domestic sources including the NRIs.