Udayan Mukherjee sums up the Budget

The market is disappointed as there is nothing on the fuel policy, foreign direct investment, and disinvestment roadmap. Two things seem to have spooked the markets. One, the fact that fiscal deficit is seen at 6.8% versus 6.2% in the interim budget. And secondly, the hike in Minimum Alternate Tax to 15% from 10%.

Here is a verbatim transcript of the exclusive interview with Udayan Mukherjee on CNBC-TV18. Also see the accompanying video.

That’s the Union Budget and the market is down 710 points. That’s because of some disappointments which have come in. There is nothing on fuel policy, MAT has gone up, and there is nothing on FDI. These were things which the market was expecting some kind of announcement on and that has not come. Perhaps deferral of key decisions or key announcements, plus the fiscal deficit number, has done the market in the first few minutes of the budget speech.

GST coming in April 2010 is a positive. FBT goes, some tax breaks have come in for IT companies, 10A-10B goes up by one year, CTT has been abolished, and for the personal income tax payer the surcharge goes. So, you will have a little more money in your kitty, but overall the market now seems to be focusing on the fiscal deficit number. On the many things which it was expecting will come through, like disinvestment, fuel policy, and FDI has not happened.

There has been no attention paid by the Finance Minister in the speech on those issues, so probably lack of focus on key expected areas plus the fiscal deficit number has knocked the market back. There has been nothing on the banking sector, insurance, and even on housing finance sops. Stocks like HDFC , ICICI Bank , SBI are the ones which have taken a key knock post budget.

Infrastructure has got a little bit in NHAI, but then it has not got a whole lot which is why that has gone knocked down a little bit as well. Many of the sectors which had gone up like education, aviation, real estate hoping for sops have got knocked back, so stocks like NIIT , Unitech etc have sold off quite a bit post budget.