Birla Sun Life Mutual Fund: Monthly Minutes - March 2016

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• published: 21 Mar 2016
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In this edition of “Monthly Minutes”, we are covering Union Budget 2016 and its impact on the markets through an AV addressed by Shravan Sreenivasula, Fund Manager. Some of the key excerpts of this production are – The recent announcement seemed to have struck a good balance between growth and fiscal prudence, with the govt concentrating on riding the course that it has chartered over past 18 months with projects like Make in India, Ease of doing business, Creating job opportunities & Efficient direct benefit transfer among other things. One of the main positive highlights of the budget was FM’s announcement of abiding by the Fiscal target at 3.5% of GDP which in turn puts pressure on RBI for monetary policy easing The fiscal arithmetic which the government assumed is quite achievable. It estimates tax revenues to grow at 11.7% and expenditure by 10.8% - both with a nominal GDP growth of 11%. The expenditure assumes most of the implementation of seventh pay commission and OROP to be done in this fiscal. To recapitalize the PSU banks, the budget has an allocation of ` 25,000 cr which is in line with the proposal of scheme “Indradhanush” announced last year. The Finance Minister also promised more if required. Other key announcements were related to focusing on supporting agricultural growth, driving rural economy & infrastructural development. The exemption of dividend distribution tax given on the distribution of income from SPV to REITS & INVITS, will pave the way for the listing of these trusts and offer a new investment vehicle for retail investors. Conclusively India as an investment case, provides the right recipe of 3 ‘R’s – lowering Rates & continuing Reforms to get Reflation. We are positive on the market from a medium term view and advise investors to invest in our balanced, large cap and multi cap funds