Union Budget 2010 - An Insight !!

Friday, 26th Feb., FM Pranab Mukherjee presented the Union Budget 2010. When Mr Mukherjee started off the budget speech, he mentioned that the key challenges that govt is facing are, one, that of GDP growth, to sustain the 9% expected growth and overcome the "double digit barrier". And, two, food inflation that has gripped the economy in recent times.

Sounded promising... But as we go ahead to read the complete budget, I think both the key issues have lost ground somewhere.

Firstly, food inflation. With a hike in fuel prices, hike in excise duty of large vehicles, I believe that transport will be dearer. Despite several incentives given to farmers like raising ECBs for cold storage, extending the repayment of farming loans by 6 months, etc., I doubt if this dearer transport will not hit food transport as well. Not only the common man bt also the farmers will be affected here.

Add to it, PDS was reduced to the tune of 400+ Cr. The most imp measure to ensure food security not given its due importance ?

Minimum value of minimum tax slab was maintained at 1.6 lacs, how does a common man get relief from the existing and the expected rising food inflation ?

Coming to GDP, with ad valorem component of excise duty increased in all non-petroleum, and excise duty, basic duty increased petrol and diesel, it will hit the manufacturing costs, thereby, making them dearer and affecting demand.

Though a major part of allocation was provided for infrastructure, which is a major factor of economic growth, I doubt if a common man will enjoy this growth as much in the wake inflation touching new highs !!!

I rest my views here. Happy holi to all !!





Disclaimer: The said technical analysis is a perception based on various charting methods. Trades on my opinion are to be done solely at your own discretion.