India promises to deliver better returns, experts say

Investors looking for a reliable and promising centre of business excellence should turn their eyes towards India, which is set to log in a remarkable recovery from the Covid-19 pandemic and provide fertile grounds for future businesses.

Experts, at an event on Thursday, hailed the positive implications of the recent Indian budget, and shared their thoughts on how it will aid the country’s recovery. The event was presented by the Institute of Chartered Accountants of India Abu Dhabi Chapter, in association with the India Business & Professional Group (IBPG).

Nilesh Shah, MD of Kotak Mahindra Asset Management Co, looked back at how the Covid-19 pandemic had impacted the business landscape in India, and said: “Due to the lockdown several investors saw their savings increase, because they weren’t spending on entertainment and other leisure activities. While business activity was severely impacted, the situation kept on improving month-on-month after the lockdown.”

He also noted that Covid-19 cases in India are dropping, as the country accelerates its efforts in vaccinating its population. “We are among the top five nations in the world that have introduced a vaccine and we are in the process of helping other nations by providing the vaccine. The improving economic activity month-on-month has also improved sentiment and fundamentals. In September, it seemed like there was not much hope, but companies delivered amazing reports on their business.”

He also noted that companies across India have become more efficient and profitable and that this trend will continue. “This year, I believe that over a period of time, India will deliver better returns. Valuations are better and the market is reasonable priced. From a long-term point of view, this budget is a game changer; this is the budget that has the potential to change India’s growth output. If this budget is executed well, then our markets will be higher year after year. But, the market nature itself will not change; markets go up and down and are volatile, and we must remember that.”

Experts have noted that the removal of double taxation for non-resident Indians (NRIs) on income accrued through foreign retirement benefits accounts, and allowing NRIs to set up ‘one person companies’ in India are two proposals that will have immediate positive implications. Another equally positive proposal is the exemption from submitting tax returns on bank deposits and retirement income for those above 75 years of age.

Tax expert, Dr Girish Ahuja, also analysed the recent budget, and noted that the country was going to be spending more on healthcare — mostly as part of its efforts in combatting the Covid-19 pandemic. “Infrastructure is also getting a lot of attention, along with affordable housing, roads, and bridges. Airports have also been improved across the country, in line with the tourism strategy, and employment has also improved as a result of new projects.”

“Small and medium-sized enterprises have taken a beating, but there will be support that is going to be offered to them,” he added. “Recovery is on the cards; simply look at how well the stock markets have performed and take that as an indicator of healthy growth.”

— rohma@khaleejtimes.com