Nirmala Sitharaman’s return as country’s FM expected to not just attract domestic investors but also FIIs: Experts

Nirmala Sitharaman took charge of the Ministry of Finance and Corporate Affairs today (Wednesday, June 12, 2024). This is the second consecutive term for Sitharaman as she was also the finance minister in the previous government. As per a PTI report, she is set to establish  a record by presenting the seventh Budget in a row and sixth full Budget consecutively.

Notably, in her previous term as the finance minister, the Indian economy grew at a rapid pace after the initial struggles against Covid. In the financial year 2023-24 Indian GDP grew at 8.2% making it the fastest growing economy amongst all G20 nations that includes both the developing economy peers as well as the developed market.

She was also instrumental in taking most of the economic challenges head on which resulted in record profits being generated by public sector banks. The erstwhile problems of bad debt and big economic frauds are largely forgotten now.

Amid this backdrop, here is how the market experts see her return as Finance Minister:

Gaurav Goel, Entrepreneur and SEBI registered Investment Advisor said that the new NDA government assumed office under the leadership of Prime Minister Narendra Modi and Nirmala Sitharaman has been retained as the finance minister of the country. This reflects continuity in economic policy and also signifies prime ministers trust in her abilities. 

Echoing a similar view, Atul Parakh, CEO of Bigul said the markets have responded positively to the return of Nirmala Sitharama as Finance Minister, viewing it as a sign of policy continuity. Investor confidence is likely to improve, given her experience navigating economic headwinds. 

Goel also remarked that the market sentiment and investor confidence is upbeat on her return as the Finance Minister. Markets have seen the ministries work in the last 5 years and their confidence has gone several notches up in her abilities. In the last 5 years the benchmark Nifty 50 index has risen by 94.43 per cent despite battling Covid in the first 2-3 years. 

The continuation, consistency and predictability of economic policies will attract not just the domestic equity investors but also the foreign investors, he added.