You can please some of the people all of the time, and you can please all of the people some of the time, but you cant please all the people all of the time.
This is the gist of Union Budget 2020.The over Rs 3,50,000 crore wealth destruction on BSE on Saturday showed that investors gave a thumbs down to the Budget.
The fall of nearly 1,000 points on the Sensex showed the equity market was expecting much more from the government.From an investment point of view, the tweak in dividend distribution tax (DDT) is going to impact individuals who fall in the higher tax bracket.
The government on Saturday proposed to remove DDT on companies, and henceforth, the tax will be shifted to the recipients at the applicable rate.The government also disappointed investors, but denying any relaxation in the long-term capital gain (LTCG) tax.Market sentiment was already weak in the country due to the ongoing protests related to CAA and NRC and the outbreak of coronavirus was adding salt on the wounds.
I believe at the index level, the market will remain under pressure for the next 5-10 days.
However, specific stocks will continue to deliver healthy returns.Capital markets are not the only responsibility of the government, which has to look at other things such as agriculture, industries and services sectors.The government has taken all the decisions that are good for the economy as well as the country.
They will ultimately benefit the stock market in the long run.Market participants should see what the government is doing to try and revive the ailing economy.
It is not necessary that the government would announce measures for the economy in the Budget.
They can come on a later date too.
I think the Budget sends out a signal that reformist measures will continue.Lets hope the economy will revive and acche din will return to the market.