Finance Minister Pranab Mukherjee presented the Union Budget today. The fiscal deficit in 2009-10 was proposed at 6.8% of gross domestic products (GDP). The divestment target was around Rs 1,100 crore.
Sanjay Sinha, CEO, DBS Cholamandalam AMC, said the 6.8% fiscal deficit target really spooked the market. "The fear is that the government will never stick to that number. They always overshoot and as it is 6.8% fiscal deficit is not a very nice number for the market to live with," he added.
Anil Padmanabhan, Deputy Managing Editor of Mint, said the budget was a growth oriented budget. "There is a lot of reaction in the market about disinvestment. But the finance minister has clearly signaled that this government is returning to disinvestment," he added.
Here is a verbatim transcript of the exclusive interview with Sanjay Sinha and Anil Padmanabhan on CNBC-TV18. Also watch the accompanying video.

Q: First question to on everybody’s mind at this point of time - why did the markets react the way they did?

Sinha: I think one should see this in the background of the expectation that the market had and primarily it revolved around hearing something about the disinvestment, the fact that he was absolutely silent about the subject and whatever little numbers which have been floating around have not been encouraging at all - it has been a big disappointment. But I think more than that a lot of probably expectations had built up around the fact that the budget would present a fairly strong macro picture going forward and the 6.8% fiscal deficit target really spooked the market. I think that’s where you saw the turning point in the market. The fear is that the government will never stick to that number. They always overshoot and as it is 6.8% fiscal deficit is not a very nice number for the market to live with.

The fear is largely coming from the fact that if the foreign portfolio money takes a negative view on this fiscal deficit number and turns negative for India then who would the buyers from this level on would be? I think before this translates into a negative flow from the FIIs, probably the local speculators are exiting their positions. 
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