Indian Budget Sent Markets Tumbling

With the news of the 2009 Indian budget, announced yesterday by finance minister Pranab Mukherjee, the stock market crashed mainly because of fiscal deficit worries as it felt that there was no significant major reform visible.

The ‘aam aadmi,’ or the common man, stands to gain the most from the budget with a loaded infrastructure push. A 100% increase in spending on power is going to make a huge difference. There are also going to be social sector schemes, and much money will be spent on rural development. The total budget expenditure is going to be the highest since India’s independence in 1947.

However, the deficit could go to a 16-year high, and a downgrade risk for the economy is feared.

An extract from the budget reads;

'The first challenge is to return the GDP growth rate of
9% per annum at the earliest. The second challenge is to
deepen and broaden the agenda for inclusive
development.'

Astaire Economist Deepak Lalwani reacted with these bullet - point thoughts;

'Populist budget seen to be fiscally profligate
Rattles market as it lacks market-friendly reforms
Sensex posts largest budget day fall since 2001
Foreign investors disappointed.'