Mr.Hemant Kanawala, Head of Equties – Kotak Mahindra Old Mutual Life Insurance in his first reaction of the Union Budget 2012 said that the impact of budget on the market shall stay neutral.
“Impact of budget on market should be by and large neutral. Although the fiscal deficit for FY13 announced by the Finance Minister is in line with the expectations, borrowing required by the government is on the higher side.
If the borrowing program of government remains elevated, it can postpone the monetary easing cycle by RBI and thereby impacting banking and investment sectors. There were not many sector specific changes in tax rates apart from increase in royalty on Crude oil, which will impact upstream oil companies like ONGC and Cairn India.
There was also an attempt to attract more interest in Equity markets through reduction in STT and introduction of Rajiv Gandhi equity scheme targeted at retail investor.â€
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