While the markets seemed a bit disappointed with the Budget, it is perhaps because of the expectations that had been built up on the back of the significant reforms push initiated by the finance minister since September last year.
However, one must say that the reaction of the stock market cannot determine the course of Budget making.
Rajiv Gandhi Equity Savings Scheme has been liberalised to incentivise higher retail participation in the equity market. Moreover, the introduction of inflation linked bonds could be a significant alternative to gold as a savings instrument.
No doubt, the best long term solution to our addiction to gold is to bring inflation down to a much lower 4-5% range.
Perhaps the only question with the current budget is whether the 19% expected growth in gross tax receipts is a reasonable assumption or not given the budgeted growth of total expenditure to `16.65 lakh crore. A lot depends on our GDP growth trajectory.
Overall, the FM has been responsible and very pragmatic in addressing the issues facing our economy and is building the foundation for an economy that will grow strongly in the coming years. The finance minister needs to be particularly commended on steps taken to augment financial savings.
The writer is CEO, Aditya Birla Financial Services