The seems to have been wrongly read by market or there had been a lot of build up in positions in expectation that the markets saw an unkind fall of big magnitude, it lost 2.52% and Nifty closed 11661.
Its not that corporate sector did not get rewarded, in fact it got a bonanza of carrying no burden on account of dividend distribution tax which used to bring distortion in dividend distribution policy. The companies that had surplus cash on hand without any expansion plan in sight were holding it back because distributing it would have caused loss to company by way DDT. Since dividend will form part of taxable income it has upset the promotors and big individual investors. But the two provisions, lowering of corporate tax to 25% and of removing DDT, the corporates now have the kindest treatment ever.
Income tax rates have been reduced by 5% across the board if deductions under various provisions is foregone (till income level of 15 lacs); this should make it much easier the process of filing and assessing of income tax returns. It will leave option off using income in the best manner that assessee finds for himself.
Farming sector gets more, social sector gets more and defence sector gets more while some liberty has been taken under FRBM which allows govt to manage matters without any new tax effort. Its not a bad thing to do when the economy is struggling to remain on growth path.
Bank depositors now have investments up to 5 lac covered by insurance scheme for protection of the same against 1 lac earlier; this is a pretty nice gesture.
There is plan to offer LIC ownership to people through IPO, its a good idea because management of this behemoth will come under direct gaze of people at large. Direct fund raising by PSBs from public is another good idea after they have been restored to health.
Infrastructure has been kept in focus and start-ups have been given a boost. I would have been happy if like Kisan Samman Nidhi payments to farmers they would have given Rs 500/pm to senior citizens over 70yrs of age as pension (I have already turned 71 yesterday).
Krishna Khandelwal
Panch Tattva Wisdom 