BSEIndia: All Stock Market News: [sharetrading] Budget 2010-11: Post Budget Analysis

Friday, February 26, 2010

[sharetrading] Budget 2010-11: Post Budget Analysis - Fiscal Finesse [1 Attachment]

[Attachment(s) from ekam ber included below]

Budget 2010-11: Post Budget Analysis - Fiscal Finesse

Budget 2010-11

(February 26, 2010)

Budget 2010-11

Budget 2010-11 Highlights

Fiscal Finesse

· The fiscal deficit of 5.5% for FY11 is better than our expectation of 5.7%. The roadmap to reduce it further to 4.8% and 4.1% in FY12 and FY13 is welcome

· Govt borrowings capped at Rs3.5 tn; +ve

· Indirect tax: Rollback of 2% is as per market expectation

· No change in service tax is a positive surprise

· Reduction in surcharge from 10% to 7.5% +ve, but MAT increase from 15% to 18% marginally -ve

· Overall, we believe that the budget was positive for the economy/market and there was no major negative surprise

· However, after the initial euphoria, market will start following the fundamentals of the economy, corporate earnings and the global events

However, the real debate is:

· Whether the fiscal deficit will slip beyond 5.5%?

· Whether the revenues targets are overstated and the expenses are understated?

· Why there was no commitment in the FM's speech to curb the inflation?

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