Post-Budget Quote: Mr. Abheek Barua, Chief Economist, HDFC Bank

Mr. Abheek Barua, Chief Economist, HDFC Bank on Budget 2022-23:

“The 2022-23 budget finely balanced fiscal retreat with supporting economic recovery. The budget focussed on a familiar strategy of driving capital expenditure to drive growth, with the intention of crowding in private investment through higher public spending. Although markets could be disappointed with a higher fiscal deficit of 6.4% of GDP for FY23 than expected, it is perhaps prudent to not undertake aggressive fiscal consolidation at this nascent stage of recovery. While elevated market borrowings are likely to pressurise bond yields, inclusion of green bonds in the borrowing plan are an interesting innovation. In terms of specific policy announcements, the move towards self-reliance through protection for domestic manufacturers (change in custom and import duties) aligns with the long-term goal of Atmanirbhar Bharat. Moreover, there is an effort to weave in short term capital spending with the long term 25-year investment plan for India. Specific moves on education and mental health issues are critical and well-recognised in the budget. Lastly, Central Bank Digital Currency is likely to have an impact on banks, but the implications of the same will have to be thought through further”.