On budget day finance minister Arun Jaitley did what Virat Kohli normally does in T20 cricket. For the first time in the history of the Indian stock market, on budget day, the Sensex gained close to 500 points. The previous record was way back in 1997 when the Sensex gained 224 points. Not only was this rise sustained, but the rally extended thereafter too. This clearly suggests that the market loved Jaitley’s budget.
So why is the market in such an exuberant mood? To a great extent prime minister Narendra Modi deserves the credit. Before the budget he created fear in the minds of investors that there would be capital gains tax on equity. The market was nervous. Till such time Jaitley was making the budget speech in parliament, the market was on tenterhooks awaiting the announcement. It moved in a very narrow range with great caution. The moment Jaitley concluded his speech, with no such announcement, the market moved up smartly – at one point moving more than 500 points. The biggest gain of the budget for the market was that there was no negative news – and that was the big positive news. The way Jaitley has packaged the budget even his harshest critics are finding it difficult to slam the budget.
But the status quo on capital gains on equity was not the only reason for the market spurting. It also liked the fact that Jaitley stuck to fiscal prudence by maintaining the fiscal deficit at 3.2 per cent for the next financial year. In l