Budget Impact

The long and short of the Budget 2010 seems to be that it will have a favorable impact on the Markets. The reduction in personal taxation rates will now place additional post tax disposable income in the hands of the people. This would either be used to purchase more goods or services or it will be invested in the market either directly or through intermediaries. Either way it will give a fillip.

The FIIs are also showing renewed interest in Indiaa as an alternative destination in their search for rapidly growing economies. The Budget has given the right signals. The increase in MAT by 3% is not good but it can be covered by performance.

I heard Mr. Ganesh Shanbag a Mumbai based Investment Advisor who expressed similar views.

He is quite bullish on Power and infrastructure. He also mentioned banks and finance companies that could become Take Over targets on further liberalization of the Banking Sector.

He stresses a long term strategy over ten years? This concept was wasted on his audience who were the members of the Tamilnadu Investor Association a majority of whom comprise individual investors whose ignorance of fundamental analysis is equalled by their desire for short run high returns!