After a three month dog and pony show of being willing to wait ofor the India Finance Minister, market showed itself to be mostly tripped by longer term program references and seemed to be talking about expectations from the PC Budget that could not have existed as it nosedived in the tail end of the series letting fresh buying interest a distant second to shorts as bears ruled the expiry and rollover seemed to be on short interest given the market’s indecision. All the market should have done was support the over INR 1.6 T in program expenses and even the INR 900 Bln in Capital expenses in Defense in FY2014 as India finally bit the bullet and despite it being a promise made ahea dof elections at least brough plan outlays back to INR 5.55 Tln and increased successful rural program footprint after almost 4-5 years to nearly INR 800 bln. India’s budget also changed tack from salutory welfare outlays to a renewed commitment to Food Security adding INR 100 ln, and Health and Education outlays of INR 375 bln and INR 750 bln respectively a far cry from petty disbursals to programs with long and successful records from MNREGA to Sarva Shiksha Abhiyan and the RGSA among others.
Clarity in processes are promised further with simplified rules to govern FII and QFI dispensation in a few days and immediate approvals in the North and WEst for over 3000 road projects after a new road regulator is named. Work on the new industrial cities at Dholera and one other, originally funded by the GoJ institutions was also included with much fanfare in the new budget. All in all, we would have given this budget 9 out of 10 with the electroal promise season not giving way to pittances and indisciplined expenditure but the market traders were seemingly ahead of the long term investors on the day and FIIs seem to be able to further dig their heels in the coming series asthe markets settle up on the seriousness of the political establishment and the likely promise of political stability of India ahead of the Economic turnaround. As we said, no miracles couls have probably righted market ecxpectations and we just get another opportunity to start a market move to the top from a bigger bottom as Nifty closed another 100 points south.