DP Singh, Deputy MD, SBI MF, says “one sector which is going to benefit is the energy sector. When we talk about renewable energy, we talk about traditional power areas, oil and gas, because in India, we have very low per capita energy consumption. Energy is the base for the overall growth of the country. So this is what we are looking at in this budget. So as far as we are concerned, our fund house had a plan for the launch of an energy fund, which in any case is coinciding with the overall ecosystem of the country.”
Out of 10, what mark would you like to give the Budget and why?
DP Singh: No, I would like to give 10 out of 10 because of the very good fiscal discipline which has been shown by the government. This looks like a budget of a very good corporate rather than that of the government. We are in the habit of looking at the deficit number being out-passed by the inflation going up above the expected numbers given in the Budget. This time, every parameter has been efficient and everywhere we have done well.
So look at the inflation number again 5.9%, they have gone 5.8%. Next year, it is done. The borrowing has been less than expected, the growth numbers are aligned and they are not showing any out of the box increase in tax collection. They are giving just 11% collection. So that gives me a hint that there are pleasant surprises in store in the full budget for the taxpayers because of good tax compliance.
All this put together and giving impetus on the energy and other priority sectors, gives a lot of this thing. Another statement which the government has given: “We will not give fish to the people, but we will make them fish.? They stated that everybody should produce power in an economic manner rather than getting free power. Those are very positive things.
Do you think income tax now is the biggest income generator for the government because as we look at the budget document and what the document also suggests, income tax revenue will account for 19% for all government revenues and resources in FY25. Corporate tax will account for 17%, GST for 18% and borrowings for 28%. Is this going to be a major chunk for the government now?
DP Singh: Yes, definitely this tax is going to be a major chunk, but the government needs a lot of tax for the welfare schemes. What they are trying to do is to create an ecosystem where employment generation and all those things are done in the private space. The statement which government gave when they came into power was that the government has no business to be in business is being factified now. The government is walking the talk.
I am very hopeful that the kind of growth numbers they have taken in the tax section in the Income Tax side of 12% is definitely because this will be a net number. So gross-wise, there is going to be definitely good surprises for all of us. But of course, for the revenue purposes, they have to look at the tax compliances and this is good enough for whatever they are doing because subsidy budgets are coming down drastically. What they are doing on the fertiliser side, on the nanotechnology side, if that happens, a good chunk of money will be saved. It is likely to happen very soon.
So there are so many steps in which it is not only the revenue, but the whole ecosystem on welfare, on employment generation is being passed to the private sector by creating a very good ecosystem.
What would be the fund house strategy and what would be the fund house interested in although we have elections and a full budget coming up. In terms of specific sectors, are you looking at anything specific post the announcement?
DP Singh: It is going to be a very buoyant equity market. Looking at the flows and the Budget, people will get more confidence that everything is in great shape. Pradhan Mantri’s Vishwas ka Budget where Vishwas or confidence is at a different level. When individuals have confidence, they put in more money.
So one sector which we really think is going to benefit is the energy sector. When we talk about renewable energy, we talk about traditional power areas, oil and gas, because in India, we have very low per capita energy consumption. Energy is the base for the overall growth of the country. So this is what we are looking at in this budget.
So as far as we are concerned, our fund house had a plan for the launch of an energy fund, which in any case is coinciding with the overall ecosystem of the country. I am not here to talk about any particular fund of mine, but what I am trying to say is the overall infrastructure, the overall growth economy, whatever is required for the growth of business is being pushed in a big way. And that itself is a theme for making money, because there are a good number of listed companies in these areas. All these companies will benefit.
But overall, looking at the positivity in the environment, the overall equity market will do well. And I am sure that now people who are sitting on the sideline will find that part of the allocation need to go now, because things are looking very, very, very good.
What would be your next travel destination – Lakshadweep or Ayodhya?
DP Singh: I think it is Pan India, it is neither Lakshadweep nor Ayodhya, but India is the theme. Hume Bharat dekhna hai (I need to see India). We are in a very sweet spot, we have the best of the governance at the central level, at the all India level, and the benefits of this growth, rather than going to the foreigners, should go to every citizen of the country, and as the largest fund house, we are responsible for taking it to every nook and cranny in the country.
Let us also talk about women empowerment. The government has tried getting women not only in the financial circuit but also on the path of financial freedom. The number of women entrepreneurs is almost 28% up compared to a few years ago. We are looking at having one crore lakhpati didi also, which was also mentioned in the budget. What will be the way ahead and how much of a focus do you think this will have in the next budget also?
DP Singh: Gone are the days when you have to grow in some particular area, you have to give some tax benefits. You have to create an ecosystem in the country. Women empowerment is an on-going journey. Especially, this government and the finance minister has always talked about women empowerment and this has happened in a big way and honestly speaking, when I look at my own company, when today my HR person was there totalling around 100 people out of which 63 were women employees.
So the point is that today, it should not be part of any budget. Just think of this as the directional move which is happening in the country. If there is some tax benefit or some tax sops that will be icing on the cake. But otherwise, the overall ecosystem has come in such a manner that there is going to be gender equality. And three or four years down the line, we should not be talking about this, that we have to empower, because that would have already happened.
My point on this is whatever government will come out, they will definitely give some benefits to the women entrepreneurs. And this is already happening. This is a work in progress. This is showing results. But we have to keep continuing with the same thing for a little longer period, not for one year or two years. This is a long term game which we will continue for a long time.
As an investor, what are some steps, if at all, you want to be taking now looking at the aspect of continuity of this government?
DP Singh: Whatever surplus you have, you keep on investing in the growth of the country.
(You can now subscribe to our ETMarkets WhatsApp channel)