“The Rs 20-trillion package is more than what one thought. We have to wait and see what the details are. I don’t think the entire amount can be financed from the fiscal. I am sure a lot of it will be guarantees and other sorts of concessions which are not pure spending of money. But the intent will be a huge sentiment booster,” said Jyotivardhan Jaipuria, founder, Valentis Advisors.
The SGX Nifty
touched a high of 9,676 following the announcement. They gave up some gains to trade at 9,598, up 4.6 per cent as of 10 pm Indian time. On the NSE, the Nifty had closed at 9,197, down 0.5 per cent over Monday’s closed on Tuesday. After rallying 14 per cent in April, the benchmark indices are down nearly 7 per cent so far this month. In recent weeks, the Indian markets
were seen underperforming some of its global peers. The government and Reserve Bank of India (RBI) have announced stimulus measures in recent months.
“The headline numbers are quite impressive. But as they say, the devil is in the details. We can only come to a fair assessment once the fine print is out. I guess quite a lot of this package could be in the form of guarantees. Stimulus plans announced by foreign governments put money in the hands, helped small businesses, and injected liquidity in the financial markets.
If the PM’s plan follows a similar approach then it will be a huge boost for the market,” said Andrew Holland, CEO, Avendus Capital Alternate Strategies.
Finance Minister Nirmala Sitharaman
is expected to announce the detailed plans in coming days.
“The emphasis on the package is on self-sufficient India. My inference is that sectors like medical devices, auto, ancillaries, and defence equipment should benefit. The package could be also about making land made available at subsidized. The PM also spoke about land and labour reforms and liquidity,” said Saurabh Mukherjea, founder, Marcellus Investments.
Mukherjea said if big part of the package benefits were incentives then the fiscal ramifications would be modest. “There might be a risk of sovereign downgrade for India but the rest of the world faces the same risk. That’s the least of our risks.”