Experts Recommend Reforms To Boost Capital Market In India In The Budget 2015

After the surprise rate cut by the RBI, everyone has their eyes on the upcoming budget 2015. While industry bodies are busy making presentations in the North Block, capital market analysts are keeping their fingers crossed.

According to market analysts, P Phani Sekhar, fund manager with Angel Broking, since the capital market has remained buoyant in 2014, the finance minister must focus on maintaining the momentum. “The market has its own set expectations from the budget. We are looking at higher spends on infrastructure, railways, industrial corridors and other such important projects,” said Sekhar.

Additionally, he said that the government should look at boosting investors’ confidence in the Indian market. “Investors are looking at the Indian market with renewed confidence. The government should focus on introducing key reforms such as the Land Acquisition Bill, which is extremely critical,” he noted.

Sharing a similar sentiment, another senior financial analyst noted that the government should introduce investor-friendly policy framework in the upcoming budget.

“Investment-friendly policies similar to REITs, Foreign Portfolio Investors (FPI) Regulations 2014 and Infrastructure Investment Trusts (InvIT) Regulations 2014 should be introduced in the upcoming budget,” stated the analyst.

Apart from investor-friendly policies, experts recommended that the budget should revise its duty structure. According to another analyst, who did not wish to be identified, said that the duty structure for commodities is extremely complex and hence, puts additional burden on the companies.

“The high excise duties have marred sectors such aviation, auto, real estate and infrastructure. Imports have become extremely expensive and have added substantially to the operating cost of the companies. The government needs to address this concern in its new budget,” he added.

Also, the government needs to take steps to boost the consumer sentiment in the above mentioned sectors. “The stocks of the companies in these sectors haven’t performed well in 2014. It should not be repeated in 2015-16,” he pointed out.

The government has been taking steps to boost the investors’ confidence, however, market players now expect the government to announce bigger reforms that will maintain the momentum in the capital market.