There is an economic term called Opportunity Cost. It means it is the cost of not doing the right thing at the right time with the available resources at your disposal. Finance minister Nirmala Sitharaman seems to have lost the opportunity to cater to the expectations of the country when she presented her second budget on February 1. There were lot of expectations with respect to reviving the slowing economy, kickstart the consumption demand and puting the economy back on the growth trajectory.
However, looking at the reactions to her budget proposals, first from the market and then from experts, it seems that it is a “Big Opportunity Lost”. By the time this issue will be out, it will be amply clear about “opportunity lost and opportunity cost”.
The budget, in a nutshell, was neutral to negative. It is neutral because it did not initiate anything exciting for the market to revisit growth and earnings outlook. Negative because the expected tax breaks and push for growth did not come in force as was expected. The markets witnessed a sharp selloff after the budget was presented.
The Sensex and Nifty were heavily beaten down by 988 points and 300 points respectively. It closed the special trading session below the psychological mark of 40,000 and 12,000 points respectively at 39,736 and 11,682. The bearish trend is expected to continue before the attention moves to global factors.
However, the scenario at the global level does not look any better. The number of people detected with Coronavirus has crossed another milestone, and may well continue to rise in the coming months as well. That will very likely lead to a downgrade in global growth projections and downtick inequities across the markets.
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