Street dismisses interim Budget incentives

Excise duty cuts unlikely to impact volumes; rate action by RBI unlikely as fiscal consolidation not structural

Interim Budgets are typically non-events, as they are mostly about account keeping and not policy measures. While Finance Minister P Chidambaram largely stuck to tradition, he did announce sops for automobiles, consumer durables and capital goods. The market, however, has dismissed these measures, as they are in contrast to his stated commitment to fiscal consolidation. Excise duty cut across the automobile segments could push up demand in the coming months but high interest rates would cap the gains. Analysts are calling this only a momentary relief for the sector, seeing a structural ...