Ashu Suyash, managing director and country head,
Fidelity Fund Management Pvt. Ltd.
a macro level, the finance minister has presented a
budget that does not make a directional departure from
previous editions. There is an emphasis on spending
in the agriculture and infrastructure sectors, which
is welcome as they were lagging the growth in manufacturing
were a few surprise announcements, which are sector
specific, especially on IT and construction, but overall
it is a neutral budget.
the capital markets side, the announcement relating
to individuals being permitted to invest overseas through
mutual funds is a very welcome one. Although, the $50,000
limit for individuals existed, there hadn''t been too
many takers given the complexity of investing overseas.
We believe that this clarification will give investors
a convenient and tested route to geographically diversifying
the mutual fund industry, I think a key statistic is
the savings rate that now stands at 32.4 per cent -
a good 3 per cent more than the previous year and on
a bigger gross domestic product (GDP) base. It is an
indicator of the tremendous potential for mutual funds.
increase in dividend distribution tax on dividends paid
by money market mutual funds and liquid mutual funds
will have a near term impact on funds in these categories.
However, there had been indications in media reports
that this was on the cards and it is not an entirely
unexpected development. In the longer term, we believe
that cash funds and bank deposits play different roles
and they each have their own place in treasurers'' portfolios.