Budget 2009: The Media Hoopla

"It is generally known, that he who expects much will be often disappointed; yet disappointment seldom cures us of expectation, or has any effect other than that of producing a moral sentence or peevish exclamation." This famous quote by Samuel Johnson sums up the Budget 2009-10 for me.

Its an event which I believe will make only one group of people laughing all the way to the bank, yes you are right.. Its the Indian Media. Media is portraying this budget as the biggest budget of our life time, the BIG B and similar crappy adjectives, which for sure is not the case.

Yes the budget will be delivered so that Indian economy grows and flourishes. But people need to understand that its just the first budget by the UPA government when its under no pressure from allies and there are 4 MORE TO GO. Thus all the reforms are not possible in one year.

Abolition of STT, CTT and other such euphemistic measure will not be taken by any finance minister who is already facing a 11% + deficit as the government would want to hold on to even the smallest stream of revenues. Also the government would not increase the FII limit in Banks, given the current global financial crisis that was only because the banks became too greedy.

The most likely reforms are disinvestment of PSUs, extension for STPIs’ tax holiday, implementation of GST by 2010, increase in FDI in insurance sector and a increase in excise duty which was cut during the fiscal stimulus package.

Thus, under no circumstances one should play long in the markets since much of the expected reforms have already being discounted in the current stock prices . Let the media mint the money and we can remain happy by sitting on the sidelines rather than entering at these levels.

P.S. You can also view our research team's consensus budget expectation report (link Below) where we have given a consensus estimate of all the expected reforms.

http://www.scribd.com/doc/17077278/KBSLConsensue-Budget-Expectations