By Navneet Munot, Chief Investment Officer, SBI Mutual Fund The finance minister has done a fine balancing job by sticking to 3.5% fiscal deficit target without losing focus on growth and staying away from any populist largesse. The possibility of a rate cut by RBI has gone up, given the strong commitment on fiscal consolidation. The Budget focused on boosting rural investment while relying on higher allocation for social security programmes. The increased rural spend, coupled with One Rank One Pension and 7th Pay Commission outlay, has the potential to lift consumer spending. While budgetary allocation to capital spending has been muted, focus has been placed on attracting extra budgetary resources for propelling public capex. The Budget should be taken positively by consumption, agriculture, financial and infrastructureoriented sectors. Increased aid for rural economy, coupled with inviting FDI in agriculture sector, should see increased sales of agriculture-related companies. Infrastructure space should see a better growth benefiting companies in roads construction and cement manufacturing. On the financial side, while the allocated amount of Rs 25,000 crore for PSB recapitalisation remains far shy of the required infusion, the government has reinforced its commitment to recapitalise public sector banks. The likely introduction of bankruptcy code and measures related to ARCs will help in better resolution of stressed assets. On the flip side, the Budget may be viewed negatively by the automobile sector with an imposition of additional tax on luxury cars. However, a revival in consumption augurs well from a long-term perspective. The Budget refrained from imposing any long-term capital gains tax and increasing service tax, which were much anticipated by the market. In that sense, it’s a positive. Though there’s no major surprise, the Budget should be taken positively by both equity and the bond markets. As the event is behind us, the market should now focus on cues from global markets and incremental economic data and corporate earnings.