Quote on Budget 2014-15 by Amar Ambani, Head of Research, IIFL


“The Budget has evoked a mixed response from market men. While many rejoiced at the lack of devils like hike in corporate taxes and reaffirmed commitment to the fiscal deficit target set during the interim Budget, others possibly expected a lot more positive news due to the strong mandate this government received. This was evident as the market swung wildly during the more than 2-hour long Budget speech by the Finance Minister.
Given the limited time at hand, we believe, the FM has done a reasonable job by promoting growth through higher Plan expenditure spend, opening up FDI in defence and insurance sectors, laying emphasis on agriculture and infrastructure and partly addressing inverted indirect tax structure.
He has encouraged financial savings by raising individual tax-payer slabs, added deductions under Sec80C, higher ceiling on PPF and reintroducing Kisan Vikas Patra.
The FM has relied heavily on non-tax revenue to make good the higher expenditure and target 4.1% as the fiscal deficit target for 2014-15. What would have excited the FDI community and stock market more would have been a clearer assurance to end retrospective taxation and details about simplification of transfer pricing.”

Amar Ambani, Head of Research, IIFL