Mr finance minister, foreign institutional investors (FIIs) will all say that you have done a great job. You are taking the economy to a higher level of growth of 9-10 per cent and as the economy moves to the higher trajectory, earnings are bound to follow.

I am very bullish after the budget. Despite all the worries of valuations in the stock markets being too high, an index of 12,000 is not unreasonable sometime during this year. And why? As earnings follow the higher plane of a 9-10 per cent GDP growth, it will propel the markets forward.

The growth of the economy is key for the capital markets. The FIIs have pumped over $30 billion over the last three years and the reason why they have done this is because they believe in the Indian growth story. That story is now accelerating.

Just look at foreign direct investment. FDI flow to China is still 10 times that of India, but when I came here in 1997, foreign companies were moving out. They were doing so in power and telecom. Today, Vodafone and a Malaysian company are investing in telecom. That’s because foreign companies know that they will make money. When foreign investors know that they will make money, they will come back.

We have been talking about a 9-10 per cent GDP growth for quite some time. But now, we have the ingredients for that to indeed happen.

The framework in areas like power, textiles, FDI in retailing, food processing and real estate is being implemented. Last year, FDI was allowed in real estate and this year, it has been permitted in single-brand retail. All these moves will have a multiplier effect.       

The FIIs will look at it as a pro-growth budget. Coming to the specifics, the rise in securities transaction tax and service tax was not unexpected. But what is really significant is the thrust on infrastructure and the road map that is being drawn for the power sector. That should really start attracting foreign investors.

This apart, there is the focus on rural spending and a statement from the finance minister of making the country a manufacturing hub for textiles. Although I did not see any further details in this regard in his budget speech, I hope that he will be looking at better labour laws in the future to be on a par with China. The thrust on food processing and the higher spending on infrastructure will also have a multiplier effect on the economy.

If I look ahead, some will say that the budget is negative. But looking at the rate of India’s GDP growth, I see a lot of foreign investment coming. There is lot more construction and lot more demand for cement and steel. Therefore, we have the recipe for growth.