Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Can Budget keep UPA in driver's seat?
Mon, 4 Mar Pre-Open

The Budget 2014 was announced on the 28th of February with a lot of expectations. However, we believe that P Chidambaram, in his 8th budget address managed to play it very safe without announcing any big-bang reforms. While there wasn't much to appreciate in the Budget, there wasn't much to criticize either. But, has he done enough to secure the UPA another term in the hot seat?

The Finance Minister made three promises, to women, to the youth and to the poor. In order to empower women he launched Rs 10 bn fund called 'Nirbhaya' to boost the security of women in public spaces. He also announced the launch of a women's only bank with an Rs 10 bn initial capital. He also spoke about starting skill development institutions in order to train people for the job market. For the poorer section of society, P Chidambaram had the direct benefits transfer (DBT) scheme, to expand through India over a year or so. Pensions, maternity benefits, scholarships and so on will also fall under the DBT scheme. Plus an Rs 2,000 tax rebate was announced for those earning less than Rs 5 lakh per annum. Tax benefits were also offered to farmers repaying loans on time. Tax incentives were also offered on home loans upto Rs 2.5 m.

On the other hand, a 10% surcharge was levied on the incomes of people with a taxable income over Rs 1 crore. Duties on luxury cars, yachts and bikes were increased. Cigarettes and cigars were made costlier. Phones which cost over Rs 2,000 will also attract extra duties next month onwards. In a way P Chidambaram played Robin Hood during the budget. Effective tax rates for the rich were increased and lowered for the poor. But, can these moves secure a vote bank and keep the UPA in the driver's seat?

Well, this time around there is no Rs 600-700 bn farm loan waiver planned. This move in 2009 helped change the political fortunes of the congress party. In fact, the cash strapped government needs all the money it can receive either through tax income, divestments or through sale of resources like radio waves and spectrum. Well, while there are some incentives for the vote bank population, they aren't spectacular. With the fiscal deficit number grimly looking down at the Finance Minister, he had no choice but to tighten his belt rather than issue a populist budget.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

Equitymaster requests your view! Post a comment on "Can Budget keep UPA in driver's seat?". Click here!


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Feb 19, 2018 11:53 AM