No reform measures
K N Sivasubramanian
CIO, Franklin Templeton Investments
The Union Budget was broadly along expected lines, given the constraints, and the government continued to focus on inclusive growth. Whilst there were no big-bang populist measures ahead of next year's elections, there were no reform-oriented measures announced. There were some expectations of directional statements in terms of expenditure rationalisation, boosting of investment activity and curbing of the current account deficit.
Expenditure allocation was raised for various social schemes but no new ones were announced due to limitations of a high fiscal deficit. The Budget arithmetic may, however, prove aggressive as the economic growth rate remains modest and there seems an over-dependence on tax revenues and divestments.
Lack of new policy initiatives alongside increase in dividend and corporate surcharge-led equity markets to reverse early gains and close in the red. The corporate surcharge is expected to bring down earnings estimates slightly. (Click for more)
