Why did the markets fall so badly? There was no big picture vision in the Budget. The fiscal deficit is at a huge 6.8% of the GDP and no big announcements were made to address the issue. No structural changes that speak of a long-term vision were indicated in the Budget.
It appears to be a hurriedly put together effort, with small bits to keep a vocal middle class quiet (the raising of tax exemption limit by Rs 10,000).
One of the reason for it can be the unfulfilled expectations of the people.In a big surprise, the finance minister totally bypassed the issue of divestment. Sale of loss-making PSUs could have boosted the market sentiment, but that was not to be.
Finance minister also surprised the markets by keeping quiet on Foreign Direct Investment. This also hurt the sentiment.
As per experts, the markets have been highly disappointed with the Budget proposals, but this could be a for the short-term.
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