Budget 2014-15 'a damp squib'; no major surprises: experts

It did not provide any major surprises either way, positive or negative, they say

Stock market participants said that the Inte rim Budget for 2014-15 turned out to be a damp squib and did not provide any major surprises either way, positive or negative.

"Being the interim budget nothing much was expected out of it. Reduction in excise duty is a welcome step, however not well thought through, as the expected tax collections have been brought down. Reduction of excise duties on cars and two wheeler's might help the sulking industry," said Praveen Nigam, MD, Amplus Consulting.

"Though it could not have been a populist budget, however the FM should have given relief to the common man at least to the extent of inflation. Overall it turned out to be a damp squib," he noted.

According to Raamdeo Agrawal, Joint MD, Motilal Oswal Financial Services Ltd: "Vote on Account did not provide any major surprises either way, positive side or negative side. In the FM's vote on account speech, the commitment was very strong towards maintaining fiscal discipline and keeping inflation under control."

"Markets valuation looks attractive as the aggregate market numbers have a solid base and upcoming elections look promising. The upside could be anything but downside is very limited from here," he added.

Another expert, Naresh Takkar, MD & CEO, ICRA said: "The absence of major expenditure announcements ahead of elections and focus on fiscal prudence is reassuring. The targeted reduction in excise to support the languishing sectors is welcome, although the extent of revival may be inhibited by the short time frame and the sluggish economic activity as well as weak sentiments."

Leaving direct taxes untouched except for continuing the income tax surcharge on 'super-rich' individuals and corporates, the Interim Budget today slashed excise duty on cars and two-wheelers, and capital goods and consumer durables to boost manufacturing and growth.

"In a major relief to the automobile industry, the FM announced reduction in excise duty across all segments. We expect the excise duty reduction to stimulate demand. This is on the assumption that there will be no roll-back in the excise duty in the final budget which is likely to be presented in June-July'14, post Lok Sabha elections," said Surjit Arora, Research Analyst, Institutional Equities Prabhudas Lilladher.

"Budget FY15 was expected to spring no surprises, stick to fiscal discipline as a theme, as macro fundamentals turn around in a gradual recovery. To that extent, the budget has delivered on the whole, with a 4.6 per cent FY14 fiscal deficit improving to 4.1 per cent FY15, albeit on optimistic tax revenue estimates," said Shachindra Nath, Group CEO, Religare Enterprises Ltd.

Barring surprises in the fine print, we do not expect the market to react negatively, given the expected trajectory of fiscal consolidation seems to be on track, he added.