The budget clearly signalled an infrastructure thrust. The Government will lead from the front. What matters is that private investments should follow, and we should see an overall investment boom in India for the next few years.
An investment boom is not an option, it is necessary for us to achieve a higher growth trajectory. It will help us to break away from the slow growth trajectory that we saw before COVID. The Government had clearly understood its role in making this happen.
Building confidence among private investors will ensure that they board this bandwagon quickly. If that happens, we will witness an investment boom in infrastructure. Increasingly, this year will belong to cyclicals. The valuations of cyclicals are not factoring that in, and investors are going to need a safe haven as inflations continue to soar. This will force investors to board the cyclicals bandwagon in order to protect their portfolios from rising inflation.
It is almost a retro moment in Indian investing. Investors who forgot what it is like to invest in times of inflation will now need to go back in time and revisit past cycles. Newbie investors will need to learn from history and adapt to the emerging context.
Overall, the budget has set the market up for an interesting and exciting reset.