India's ‘pro-growth' budget

Last week the Indian government unveiled its annual budget, which outlined their focus on domestic growth.

According to Sam Mahtani, manager of the F&C Indian Investment Company, the budget was neutral with equal positives and negatives. However the market reacted with disappointment as the expected ‘big bang' announcements failed to materialize.

"There is no doubt that this is a pro-growth budget, with particular emphasis on infrastructure, and I consider it positive that they have not rolled back any of the excise duty reductions announced in December" said Mahtani.

Mahtani is upbeat on India and likes the infrastructure sector, with positions in companies such as Jaiprakash, BHEL and L&T.

Whilst the markets are dissatisfied, particularly after the recent encouraging economic survey results, Mahtani sees no adverse impact on foreign portfolio flows. "One has to bear in mind the new Government has 5 years in which to implement the reform programme. For that reason it is essential to adopt a long term view."

"In my view, the India story remains on track for the foreseeable future and one in which I feel investors can benefit from a very good return", Mahtani concluded.