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Highlights of the Union Budget presented today.
Key factors to note are as follows:
· Fiscal deficit numbers (actual as well as projected) are quite heartening.
· There have been no major populist measures.
· There have not been any major reforms announced – GST date is still uncertain and DTC is scheduled for April 2012.
· Implicit in the lower projection of the subsidies is the hope that the prices of petroleum products and fertilizers may be partially decontrolled in the coming year.
There is no explicit assurance of the same though.
· Service tax maintained at 10% against the wide expectation of an increase. Excise duties not raised either.
· The implications for various sectors are summarized in the attached document.
Overall, the budget is quite incremental and not bold. Thankfully it is not populist either.
Hence on the balance the sentiment post budget amongst market participants has been mildly positive.
Our equity market outlook remains positive post the budget.