After studying law I vectored towards journalism by accident and it's the only job I've done since. It's a job that has taken me on a private jet to Jaisalmer - where I wrote India's first feature on fractional ownership of business jets - to the badlands of west UP where India's sugar economy is inextricably now tied to politics. I'm a big fan of new business models and crafty entrepreneurs. Fortunately for me, there are plenty of those in Asia at the moment.
The Union Budget is probably the most eagerly awaited event for India’s stock markets. In the run up to the Budget, a unique development -- a small cottage industry of Budget predictions -- inevitably springs up. Tax rates, the direction of government spending, duties and anticipated government receipts, personal taxes – it’s all fair game.
This year, it is demonetisation, the effect it has had on the informal economy as a backdrop, talks of a possible stimulus and fears of a tweak to the long-term capital gains tax.
Market watchers peel through the fine print to see if this is likely to have a material impact on the earnings of companies. Tax giveaways such as a phased lowering of the corporate tax rate that Finance Minister Arun Jaitley announced in 2016 would, in time, boost their bottom line and inevitably lead to a rerating in their stock prices.
But when we assess investor sentiment, most other measures barring the lowering of duties fail to have a sustainable market-wide impact. As a result, the post Budget froth rarely lasts beyond the first month after the Budget is announced.
Forbes India analysed the last four Budgets and looked at how markets fared in the 15 days prior to and after the Budget was announced.
February 28, 2014 – The market rallied both before and after the Budget in anticipation of the Narendra Modi-led BJP’s victory in the general elections.