Msearch Post-budget Outlook 2011-12: Well managed but no significant move towards economic reforms.
Finance Minister Pranab Mukherjee sprung very few pleasant transformations on his Union Budget for 2011-12, but made no significant move towards giving a new impetus to economic reforms. With a neutral outlook on budgetary reforms which was mainly on the back of inflation fears and a dip in FDI, Finance Minister Pranab Mukherjee presented budget keeping eyes on forth coming elections with five states Assam, Tamil Nadu, Puducherry, Kerala and West Bengal-- heading for polls.
Indian stock markets certainly cheered the move, as it did his tax cut for Corporates and a number of measures to enable more FII dollars to be poured into the Indian markets. Primary among these is relaxing the limits for FII investments in mutual funds.
What was missing in budget 2011-12, No major announcement of allowing or increasing foreign direct investment (FDI) in retail and insurance space, which was widely expected in the markets. Of course, such announcements do not necessarily have to be made in a Budget speech, even though the platform has traditionally been utilized to state such major initiatives. Roadmap on oil subsidy was out of cards and finally guidance on long-term infrastructure borrowings was also a missing shot in the budget.
For detailed report please find link for review and highlights.
http://www.moneycontrol.com/news/market-outlook/roadmapoil-subsidy-outcards-gupta-equities_526819.html
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