Budget 2024: Govt to keep infra development, manufacturing in focus, says Sonam Udasi of Tata Mutual Fund

Sonam Udasi expects Budget 2024 to continue fiscal deficit targets and not be populist ahead of General Elections 2024.

Nishant Kumar
Published22 Dec 2023, 01:05 PM IST
Sonam Udasi, Senior Fund Manager at Tata Mutual Fund
Sonam Udasi, Senior Fund Manager at Tata Mutual Fund(Tata Mutual Fund)

Sonam Udasi, Senior Fund Manager at Tata Mutual Fund expects the Budget 2024 to continue on its stated path of fiscal deficit targets. Moreover, Udasi does not expect a populist budget ahead of the General Elections 2024. In an interview with Mint, Udasi shared his views on markets and the rise of retail investors. Edited excerpts:

What are your expectations for Budget 2024? What will the market look for in Budget 2024?

We expect the Budget 2024 to continue on its stated guide path of fiscal deficit targets. Focus on infrastructure development and measures to enhance Indian manufacturing competitiveness should continue unrelentingly in our view.

Also Read: Major announcements in the upcoming Budget unlikely; India on the cusp of huge growth, says Sandeep Raina of Nuvama

Do you expect this Budget could be populist in the run-up to the General Election?

This government has continually shunned short-term populism and focused on long-term productivity benefits. We think the same would continue.

Also Read: Budget 2024: Expect some relief on the personal income tax front, says Amitabh Mohanty of JM Financial

Nifty 50 has underperformed the S&P 500 in 2023. What is your outlook for the domestic market in 2024?

Nifty 50 has done well over the last one year and is at a decent premium to global markets. So in the short term, it may continue to lag behind its global peers. 

That being said, medium-term trends may look fine for Indian equities considering the continued broad basing of the Indian economy towards manufacturing prowess.

Also Read: Nifty 50 up 18% year-to-date, gains 9% in last two months; what should be your equity strategy? Here's what experts say

Most positives, in terms of strong economic growth and rate cuts, are already on the table for the market. What could give further impetus to the market?

India is at the start of a major transition to deepen manufacturing strengths across sectors like electronics, defence, railways, renewables, energy storage and auto components to name a few. 

The manufacturing shift is both government-led (via PLI), as well as due to changes in global trade equations. 

As these strengths come to the fore, the Indian economy is likely to become more broad-based and thus earnings are likely to reflect the same. 

This I believe will continue to be the key driver for the Indian economy and consequently, for Indian equities.

How could the General Election outcome impact the domestic market?

Past trends suggest that Election periods are generally volatile due to the expectation of uncertain outcomes. 

Owing to the recent state election outcomes, investor expectations on the risk of shock outcomes have come off. 

While this period may bring volatility, the long-term growth potential of India will ultimately trump everything.

There are apprehensions that the US will see an economic slowdown in 2024. Should Indian investors be worried?

Recent US Fed guidance on easing interest rates in 2024 bode well for risk asset classes. 

While the US is likely to get into slow gear, equity markets are likely to discount this and look past this. 

Indian investors in our view, should focus more on asset allocation strategies for their long-term goals.

The Indian stock market has seen a remarkable rise in retail investors in the post-Covid world. What does it mean for the Indian market?

This is a very interesting and thought-provoking question. For us as a mutual fund industry, the deepening of the investor base is very heartening and indicates the growing sophistication of Indian retail investors. 

As India and Indians grow richer, we believe retail participation will become more sticky and the financialisation of savings trend will get more legs as years go by. This will translate hopefully, to more depth in the Indian equities market.

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Disclaimer: The views and recommendations above are those of the expert, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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First Published:22 Dec 2023, 01:05 PM IST
HomeBudgetBudget ExpectationsBudget 2024: Govt to keep infra development, manufacturing in focus, says Sonam Udasi of Tata Mutual Fund

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