The 2022 budget did create some tremors that shook the markets with its new reforms and plans to put the country within the trajectory of progress and growth. Rakesh Jhunjhunwala, the well-known investor while sharing his thoughts about the budget expressed his optimism concerning public sector banks stating the rather ridiculous valuations at the moment. However, it doesn’t seem like he shares the same conviction about startups. He is of the opinion that the present enthusiasm and existence surrounding startups are temporary and the future holds something entirely different. Thus he deems it prudent to stay away from the young tech companies which are all the rage in the country at the moment. Read along to know more.
The What and Why
Rakesh Jhunjhunwala is convinced that this year the country is all set to witness a massive change. After the union budget, he shared his insights with CNBC-TV18 about the tax rates and the annual net tax revenue and how it is going to be different this fiscal year. In his words,
“I can bet that net tax revenue in the current year is Rs.3-4 lakh crore higher than budget expectations for the rest of the financial year 2021-22. Hence fiscal deficit will be 1-1.5 percent lower than budget estimates. This clearly indicates that next year collection will be higher than Rs.4 lakh crore, so this is ultra-conservative estimates of tax collection.”
For April-December FY22, the gross tax revenue to the center was Rs 19.29 lakh crore while the net tax revenue amounted to 14.74 lakh crore. The union budget indicated a few revisions by the government as it estimated the gross tax revenue to Rs 25.16 lakh crore and net tax revenue to Rs 19.35 lakh crore. It is expected that India will grow by 9.2 percent in the current fiscal year. Thus, a capex of Rs 7.5 lakh crore is targeted for FY23, which is 35 percent more than the previous year.
Jhunjhunwala maintains his usual strain of enthusiasm as he expects the market to perform exceptionally well. He is looking forward to the government’s tax rules change which will have a direct and significant impact on the GDP growth according to the investor. He also expressed his opinion that the world is opening up to India given the fact that the country has a “fair and well-regulated tax regime.” Whether Jhunjhunwala’s expectations for the country will turn into reality and whether the country will enter the realm of the so-called big change remains to be seen.