I believe that the community that is going to benefit the most from this budget is Bania's, Marwaris and alike (read the thrifty ones). As the FM left more money in the hands of public in general, by bringing down tax slabs, he also kept bringing more products/services under the ambit of CENVAT/Service tax. The public will win on direct taxes front and loose on the indirect taxes front but this has huge implications for the wise as they get the power to choose to be affected or not. Savings and Investments would rise giving a thrust to Capital Markets.
Again, as always, middle and lower income group, specifically individuals earning less than 25,000 pm (I think most of us fall in this category) were left to burn. On one end, they don't benefit from fall in tax rates and on the other, they will have to pay more indirect taxes. Fuel price hike would put an upward pressure on inflation, adding to their worries.
The best part I liked was FM wanting to bring all government spendings on Oil marketing companies under the Fiscal Balance Sheet as opposed to off-balance sheet items they have long been. This will add to the fiscal responsibility of the government but would also mean that volatility in global crude oil prices would be passed on swiftly.
Some articles I read speak that though the governments has put out an ambitious target on reducing Fiscal Deficit to 5.5% of real GDP, the government has failed on the Revenue Deficit to GDP front, meaning government will still have to borrow more from markets, making the budget worrysome and adding to borrowing costs of corporates.
Anyways, Indian equity markets have broken from a narrow range set before the budget only to get into a broader range, which I believe could be taken out on either side, as and when the clarity on global front emerges. For now, an inverted Head and Shoulder pattern has emerged on Nifty.
4950 is a long term resistance above which the target looks like 5150 with resistance around 5050 and 5100. 4850 is the support below which support is at 4720 levels.
