Deutsche Bank Expects Arun Jaitley to Present 'Path-Breaking' Budget

Expectations of a reform-oriented budget from the Modi government continue to rise by the day, which perhaps explains the optimism in stock markets. The Nifty scaled the key 7,600 on Monday rising over 1 per cent despite news of a deficient monsoon. June rainfall has been the scantiest in a decade, according to reports.

Deutsche Bank expects Finance Minister Arun Jaitly's maiden budget to "surprise positively". The brokerage says Mr Jaitley's "path-breaking budget" will (1) shift the bias of government policy from consumption to investment (2) raise the sustainable GDP growth rate by intensively promoting labour-intensive manufacturing and infrastructure investments (3) address fiscal imbalances through combination of politically prudent subsidy rationalization and raising non tax revenues (4) create enabling environment conducive for domestic savings to reduce the savings investment gap.


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