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Nirmala Sitharaman is India’s New Finance Minister: Here’s What Market Experts Say

Though surprised, market experts have still welcomed the move, and want to see how Nirmala Sitharaman handles the various challenges that the Indian economy currently face.

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Updated:May 31, 2019, 6:19 PM IST
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Nirmala Sitharaman is India’s New Finance Minister: Here’s What Market Experts Say
Newly appointed Finance Minister Nirmala Sitharaman takes charge at South Block, in New Delhi. (Image: PTI)

Narendra Modi’s new Cabinet ministers were allocated their portfolios on Friday and the one appointment that raised the most eyebrows was that of Nirmala Sitharaman as the new finance minister. Sitharaman will become the first female finance minister of India after Indira Gandhi. Not only that, she will also serve as the corporate affairs minister.

Interestingly, in 2017 when Sitharaman was given the responsibility of the defence ministry, she was then also the first woman to be appointed full-time defence minister of India in its entirety.

Though surprised, market experts have still welcomed the move, and want to see how Sitharaman handles the various challenges that the Indian economy currently face. Here’s a brief look at what market experts are saying:

Sanjeev Jain, vice president (equity research), Sunness Capital India

“Nirmala Sitharaman’s appointment as the finance minister is a welcome move for D-Street.”

“She is appointed as an FM under the current challenging environment like liquidity crunch, as well as NPA (non-performing assets) issue. She has good experience to handle the challenging environment.”

Sameer Kalra, founder and president (research), Target Investing

“The stock and bond market will welcome this move, (but) there might be some disappointment as a lot of domestic players speculated of another outcome.” “FIIs (foreign institutional investors) will also be happy and would expect inflows to increase as this gives north block a new leader with similar attributes as previous minister.”

Garima Kapoor, economist and vice-president, Elara Capital

“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 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.”

Ajay Bodke, CEO (portfolio management services), Prabhudas Lilladher

“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 and downtrodden and yet ensure the government’s firm commitment to adhere to medium-term fiscal consolidation.”

Jagannadham Thunuguntla, research head, Centrum Wealth

“The ambiguity of portfolio allocation is now removed, so this is good for the market in a sense. We will get to see Nirmala’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.”

Yogesh Nagaonkar, founder and CEO, Rowan Capital Advisors

“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.”

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