Nirmala Sitharaman is new finance minister: Allocation of portfolio came as a surprise, say economists, industry leaders

Mumbai/New Delhi/Bengaluru: Prime Minister Narendra Modi on Friday named Nirmala Sitharaman, previously the country’s defence minister, as the next finance minister, while the chief of the Bharatiya Janata Party (BJP) will become home minister.

BJP President Amit Shah masterminded the party’s landslide victory in the April-May general election.

Here are the views of financial experts on Sitharaman taking over as finance minister —

Garima Kapoor, economist and vice-president, Elara capital, Mumbai

“This allocation has come as a surprise, but I would say Nirmala has done a fairly good job as defence minister and she has proved that she has got a very good acumen. I think she fits the bill better than anyone else.”

“After (Arun) Jaitley, she is the best bet that Modi could have had. She has worked under the ministry, has domain knowledge, and has also worked in the sector. So, all the main boxes are ticked.”

 Nirmala Sitharaman is new finance minister: Allocation of portfolio came as a surprise, say economists, industry leaders

File image of finance minister Nirmala Sitharaman. PTI

“Nirmala also did a fantastic job defending the Rafale deal in the Parliament, and worked well in whatever little time she was handling defence. So, this may also be kind of a reward for a job well done.”

Ganesh Kumar Gupta, President, Federation of Indian Export Organisations (FIEO)

“The new government has to address infrastructure bottlenecks to impart competitiveness to exports. The exporting fraternity looks forward to support encompassing economic growth, sustainable and inclusive development.”

Yogesh Nagaonkar, Founder and CEO, Rowan Capital Advisors, Mumbai

“It is a big surprise and very unexpected news. The initial expectation of the market from her would be to see how she addresses liquidity concerns. We need to have good liquidity in the market to achieve growth. How the PSU bank crisis will be addressed will also be watched.”

“Frankly, the portfolio should have been given to Piyush Goyal, who is a CA by qualification, and he would have been the first choice of the market. But, I think Nirmala has been doing well previously, so it should be alright.”

Omkeshwar Singh, Head Rank MF, Samco Securities, Mumbai

“It is a surprise as the market was expecting either Piyush Goyal or Amit Shah (to be the Finance Minister). It will take some time and we will need to see how she performs. The major challenges will be the GST Council and how she will manage that and also economic growth. For a short term, it will be an uncertainty as her appointment was not expected.”

Sachin Taparia, Founder and Chairman, LocalCircles

“As far as startups go, having Mrs Sitharaman as the finance minister is a good thing as it was under her tenure as the commerce minister that Startup India was launched.”

“There are a number of direct tax and GST-related issues that are negatively impacting startups and we look forward to working with her.”

Ajay Bodke, CEO-PMS, Prabhudas Lilladher, Mumbai

“Nirmala Sitharaman is eminently qualified to steer India’s economy, which is facing multiple headwinds of slowing consumption impulses, moribund private capex cycle and anaemic exports.”

“With limited fiscal manoeuvrability, it remains to be seen how she can inject a strong dose of fiscal stimulus to revive animal spirits. She will need to strike a delicate balance between the re-distributive policies advocated by Mr Modi towards the poor & downtrodden and yet ensure the government’s firm commitment to adhere to medium-term fiscal consolidation.”

NR Bhanumurthy, Economist at National Institute of Public Finance and Policy

“The choice of Nirmala Sitharaman as the finance minister will improve optimism on the economy as with her finance and trade background she could quickly adapt to deal with the economic challenges. The new finance minister will have to take steps to revive consumer demand and investments to boost economic growth as the economy is likely to grow below 7 percent for second consecutive year.”

Jagannadham Thunuguntla, Research Head, Centrum Wealth, Mumbai

“The ambiguity of portfolio allocation is now removed, so this is good for the market in a sense. We will get to see Sitharaman's proposals and approach in the budget, which is due in about a month.”

“Emergence of clarity is what was important, and now the narrative in markets will be about the economic policies that will be adopted to revive and stimulate the slowing economy.”

“To stimulate the economy, the Modi government must have thought it will be good to give the portfolio to someone who understood and handled commerce.”

Beksy Kuriakose, Head of Fixed Income, Principal Asset Management, Mumbai

“It is too soon to say. I have a neutral view. We will have to wait for her to speak to get her thoughts and ideas on reforms for the markets and the economy, but it will be in line with what the BJP-led government would overall target anyway.”

Sandip Sabharwal, Domestic Fund Manager, Mumbai

“Nirmala Sitharaman is a relatively unknown entity despite holding a key portfolio in the previous government. Expectations as such will be low. From the markets’ perspective, it’s neutral at this stage.”

Your guide to the latest cricket World Cup stories, analysis, reports, opinions, live updates and scores on Follow us on Twitter and Instagram or like our Facebook page for updates throughout the ongoing event in England and Wales.

Updated Date: May 31, 2019 17:05:13 IST