Thank you for the continuity: Krishnamurthy

In the Budget speech, you will see a trend towards large investments in infrastructure, writes V Krishnamurthy, head JP Morgan India.

The Budget is increasingly becoming a non-event, fortunately. The buzz of anticipation and intense analy sis thereafter is largely nostalgia. The devil (or God) perhaps will appear in the detail.

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This Budget had a few major announcements for the mutual fund industry — alignment of the definition of equity funds in the IT Act with that of SEBI, and aligning of tax benefits for closeended schemes with open-ended ones. Equity exposure of a fund will now have to be at least 65 per cent to get beneficial tax treatment. So much for media speculation that debt funds would get the same benefits as equity funds.

So far, the provision of investing abroad has not excited the mutual fund industry, because anticipation fades as implementation stumbles at the door of RBI’s reluctance to allow forex outflow.

Rapid progress on the Golden Quadrilateral and East-West Corridors is likely to give a fillip to the stock market. Similarly, the debt market did a little jig on the announcement allowing greater participation by FIIs. Many of the measures to improve customs and excise structures will similarly help India progress towards simpler structures.

After every ‘Dream Budget’, finance ministers have tried to inch taxes upward while trying to maintain a semblance of moderation. This one seems no different.

But perhaps, the most important development is that changes have been incremental and in the right direction. It’s never comfortable when a few words from the FM change your whole working environment. He has chosen continuity for which I am grateful.

(Vijayan Krishnamurthy heads J.P. Morgan India Pvt Ltd)