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
What else is happening in the markets today? Dig in...
TATA MOTORS share price is trading up by 5% and its current market price is Rs 346. The BSE AUTO is up by 3.2%. The top gainers in the BSE AUTO Index are TATA MOTORS (up 5.3%) and M&M (up 5.7%).
TRENT share price is trading up by 11% and its current market price is Rs 920. The BSE 500 is up by 0.8%. The top gainers in the BSE 500 Index are TRENT (up 10.6%) and BASF INDIA (up 12.1%). The top losers are CRISIL and BAYER CROPSCIENCE .
JAIN IRRIGATION share price is trading up by 8% and its current market price is Rs 20. The BSE CAPITAL GOODS is up by 1.1%. The top gainers in the BSE CAPITAL GOODS Index are JAIN IRRIGATION (up 8.2%) and NBCC (INDIA) (up 6.0%). The top losers are CARBORUNDUM UNIVERSAL (down 1.4%) and GRAPHITE INDIA (down 2.0%).
ADANI GAS share price is trading up by 10% and its current market price is Rs 585. The BSE 500 is up by 0.9%. The top gainers in the BSE 500 Index are ADANI GAS (up 10.5%) and BASF INDIA (up 10.2%). The top losers are MAHARASHTRA SEAMLESS and TAMIL NADU NEWSPRINT .
IFCI share price is trading up by 13% and its current market price is Rs 11. The BSE 500 is up by 0.6%. The top gainers in the BSE 500 Index are IFCI (up 12.6%) and SYMPHONY (up 17.1%). The top losers are PRESTIGE ESTATES and TV TODAY NETWORK .
Indian share markets open higher. The BSE Sensex opened up by 481 points, while the Nifty is trading higher by 137 points.
View More Indian Share Market NewsLast time the smallcap index crossed 19k a big correction followed. Here's what makes it different this time.
In this video, I'll show you how to get started on the path to daily trading profits.
In this episode, ace trader Brijesh Bhatia talks to us about the best investments of 2021, his profitable trading system, and much more.
An Indian company founded three decades ago in a garage caught my attention...
More
Equitymaster requests your view! Post a comment on "Can Budget keep UPA in driver's seat?". Click here!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear
on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!