Accordingly in india budget is one of the most awaited events and at the same time, most hyped one too. I am saying so as over the years budget is losing its significance. There are a couple of reasons for the same. Firstly, government key policy and tax measures are not restricted only on budget day. In september 2019, we saw a big tax rate cut for corporate.
Apparently in the past measures like this would have been announced only in the budget speech. Secondly GST implementation has taken away tweak in excise or customs duties. Duty changes were one of the key factors used to make corporate and stock market anxious during budget time. Perhaps last few years stock indices are also behaving in a muted manner on budget day. We no longer experience wild fluctuations in stock indices on the budget day which was the norm in the past. Now indices movement is almost the same as any other day. I have compiled the last eight years budget day movement of Sensex.
Moreover only two times Sensex moved up or down by more than one percent of Budget day over the previous close. The best gain on the budget day came in 2017 with 1.75 per cent gain and maximum loss was seen in march 2012 with a decline of 1.18 per cent. In the past, modi government did not see capital market favourably and hence expecting relief on dividend distribution tax as well as long term capital gains looks ambitious.
