Budget and Market Crash

Budget and market crash

Markets went down because of burden of their own expectations, there was so much expected from the budget and the government, that it was almost impossible for the government to do all that and more to ensure that the markets go up from the point that they were.

All and all it looks like a decent budget and a few long awaited measures like scrapping of FBT has been taken. Also a renewed commitment to GST implementation guideline of April 10 is good news.

Needless to say market was expecting much more and has crashed. Market was expecting a clear road map to disinvestment, with a target. Road map on how government will reduce fiscal deficit, FDI in Insurance & retail. Tax rebate, fiscal stimulus, rebate on tax paid on home loan, reduction in taxes etc., which has not happened and markets have crashed.

What has happened though is a lot more expenditure then what India can afford to make.

On the other hand I am sure market had reached to a point from where it needed a huge push to move any higher. Now since that push is missing markets are disappointed.

Related articles by Zemanta

• Budget 09: FBT Gone; 5% Excise Duty On Set Top Boxes; Higher DAVP Rates To Stay; Reactions (contentsutra.com)
• America's Fiscal Train Wreck and Cassandra's Curse (paul.kedrosky.com)