Budget - A Damp Squib

No Tax Cuts. No major policy announcements. No major triggers for the market. After this interim budget the govt will be on the election mode and there is a virtual freeze on the policy matters in this fast deteriorating crisis.

Highlights :-
1. Fiscal Deficit - Expected 2.5% actual ~6% might reach 10% by 2010 of GDP.
2. GDP Growth - Expected 9% actual ~6-7% might reach 4-5% by 2010.
3. India investment rating to go down based on current fiscal deficit parameters.
4. Some good news in terms of higher allocation to NGRM( National Rural
Employment Guarantee Scheme) and JNNURM (Jawaharlal Nehru National Urban Renewal Mission).
5. Industry has given thumbs down to no event budget. This was a last chance to give a support but its an oppurtunity lost.
6. No tax changes in interim budget
7. All the temporary Cess not removed and seems to be permanent taking tax levels to 34%
8. Excise Duty and GST not reduced according to plan to abolish it completely by 2010. Now it might take longer for tax rationalization.
9. Relaxed fiscal responsibility and budget management target to dangerous levels and may need additional measures in next budget to revert to fiscal consolidation.
10. Revenue deficit of 4.4% of GDP v/s estimate of 1%

Recently rally expecting some good news has already been fizzled out.