Union Budget 2010-11 – No brake in momentum

Finance Minister, Mr. Pranab Mukherjee, managed to do the unexpected in the Budget. In what was largely being feared as an exercise that could have put some friction to the recovery that the Indian economy is currently witnessing, it actually turned out that the Finance Minister has managed to effectively conclude this exercise in a highly balanced fashion. This has left a lingering 'feel-good factor' in the minds of most segments of the society; be it corporates, individuals, economists, etc.

The markets have already given thumbs up to the Budget. What has aided market sentiments is the fact that the expectations had been quite low in the weeks prior to the Budget. Also, the apprehensions with respect to the extent of the stimulus withdrawal possible in the Budget had kept market participants shying away from investing. However, not only was the stimulus much gradual than anticipated, the FM has managed to please a large section of the economy without compromising on fiscal responsibilities, which was accepted well by the market. Thus, at the current juncture, one can safely conclude that there seems to be no brake on the momentum being witnessed in the economy as the FM has been calculative enough to initiate a move towards fiscal prudence without jeopardizing the country's growth prospects.

By, Hitesh Agrawal, Head – Research, Angel Broking