You are unhappy for sure.
Nilesh Shah: I think logically, rationally, who is going to be happy with more taxes? We are all humans at the end of the day. But if the capital gains tax was hiked, STT is hiked, probably dividends, tax on dividends in the hands of the investors that should have been done away with because that is double taxation. Let us look at quantum. It is like 10 becoming 2.5 and the long term, generally, definition you are trying to increase. One side, we are saying that, look, do not worry folks India is getting long term SIP money, that is the India story. For an SIP investor who is coming into India if that is the India story and if the F&O market has become frothy, then checks and balances have to come in. I mean, just think about it. I mean, if India is the SIP story, then nothing changes there.
Nilesh Shah: No, fair enough. I think the STT on F&O is a step in the right direction. If the idea is to essentially curb volumes on the F&O side I think that is fair enough. I am just saying is that for a long-term investor, there is STT, there is a hike in LTCG, and there is a tax on dividends as well.
Do you think like on the election day, the market was bought when there was a big decline, this also is going to be a good buying opportunity because look at the fall. I mean, if there was panic which had to happen in a market which is an extended market, where mid and smallcap stocks have become humpty dumpty, valuations are rich, the fall has been bought into. Let us look at the intraday graph. As of today, I do not know what happens tomorrow, but today the fall has been bought into.
Nilesh Shah: That is because there are several measures to boost the economy. I think the market will get back into the fact that there is a 3.4% of GDP allocation to infrastructure. Two, there is an unprecedented focus on urban housing, which I think is going to be a huge boost for the entire economy. The third is the whole focus on MSMEs and helping MSMEs to access credit better, more credit, again it is going to be a huge booster dose for the bottom of the pyramid as far as the economy goes. I believe these are the three big initiatives on which the market will start to focus. These are initiatives which will boost growth, which will boost earnings, and at the end of the day over the medium to long term what matters for the markets is economic growth and earnings growth.
Couple of other pointers as well coming in from the budget. Focus on energy security, infrastructure, urban development, again a thrust on manufacturing and services. Does the investment landscape change because these are the sectors which in any case have been doing well and the market is completely concentrated on those.
Nilesh Shah: Yes, but I just feel that these sectors continue to get a longer runway of growth. I think the investment thesis gets further solidified as far as these sectors are concerned and honestly, these are the sectors which need to continue to be provided focus and fillip so that India’s growth rates remain high, remain elevated and we truly get on to a path of becoming moving towards a $7 or $8 trillion economy in the next few years and I think to get there we need that focus on these sectors.
So, I clearly believe that this budget focuses a lot on the real economy and that is something which probably yet is getting kind of ignored in context of some of the tax hikes.
But otherwise, I clearly believe that this has been a budget for the real economy. This has been a budget for really the big sections of the economy which can continue to turbocharge the economy and that is the right thing to do.