The Narendra Modi government needs to fix the banking sector, specifically public sector banks, in order to make India a $5 trillion economy as the nation's non-banking financial companies are not enough to support the economy, said Andrew Holland, chief executive officer of Avendus Capital Alternate Strategies.

Share Market Live

NSE

The auto sector is likely to get a boost from the government's plans to kick-start the economy in the Union Budget, Holland said. “I am guessing that we are at that point now where everyone is throwing in the towel, so it is probably a sector which I am looking at more now because of its value. I am not saying it is time to buy straightaway but I think it is a relook at some of the companies.”

Holland added the government will continue spending on the infrastructure despite the talks of slippages and fiscal deficits, which, according to him, are not that bad. "If we get the confidence back into the private sector that is where you will see the private capex turn up. I still think that is on the cards for the second half of the year. The capital goods sector is a sector, which we have been looking at, we like and we think will do well over the next one year.”

On the US market, Holland said the market already expects a 50 bps cut in July from the US Federal Reserve, and, as ECB President Mario Draghi said, all the central banks are going to reduce rates, and it is going to be more significant in the US.

“It is an opportunity for India with the trade wars to attract more capital. So if you do some of the right policies and ease doing business in India then I am sure we can attract more capital going forward,” he said.

First Published:Jun 24, 2019 12:52 PM IST