With the Union Budget 2025 just around the corner, the financial world is abuzz with speculation. Ihab Dalwai, Fund Manager at ICICI Prudential Mutual Fund, sheds light on the key measures he believes could reignite economic growth and address critical challenges. Here's what he had to say during our exclusive interview.
With the Union Budget approaching, what are your key expectations from the government in terms of fiscal policy and economic reforms? Are there specific areas that you believe could significantly impact the equity markets?
The spending momentum of the government, especially in the capex (capital expenditure), has slowed down to some extent from a base of very good spending, which we've seen over the last three to four years. So, the expectation is that spending momentum will pick up. There has been certain fiscal consolidation, which the government has also guided and has been planning to do. I think that is okay, but the capex momentum, if that comes in, also has a very positive reinforcing effect on the entire economy.
Secondly, I would say the lower end of the consumer or the slightly lower-middle-class consumer; it appears they are overleveraged, and there is some stress in that segment of the market. So, some relief to that segment of the market in whatever way or form is possible can also result in the pickup of broader consumption. We aim to relaunch the capital expenditure cycle and provide some respite to the market or economy segments currently experiencing significant stress.
Conclusion
Ihab Dalwai's insights highlight the critical need to balance fiscal discipline with targeted measures that can revitalise capex momentum and provide relief to stressed consumer segments. As the Union Budget 2025 approaches, his perspective underscores the potential for these measures to drive broader economic recovery.
Also read: Union Budget explained: What it is and why it matters
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