Mumbai: It was a roller coaster ride on the domestic bourses with the Sensex and Nifty witnessing wild swings as the Union finance minister Arun Jaitley presented his maiden budget on Thursday.
After opening the day on a flat note, the markets drifted lower after the finance minister said that the government would constitute a special committee under the Central Board of Direct Taxes (CBDT) to look into all cases arising out of the retrospective tax clauses introduced by the previous government.
The Sensex tanked 327 points in the intra-day trade as the markets expected that the new government would repeal the retrospective tax amendments, which was viewed as a major hurdle for foreign investments into India.
However, with the budget spelling out policies to revive manufacturing and investment activities, the Sensex staged a smart intra-day recovery of over 800 points from its day’s lows and finally ended the day at 25,372.75, down just 72.06 points or 0.28 per cent. The Nifty, ended the day at 7,567.75, down 17.25 points or 0.23 per cent.
“Banks have been exempted from CRR and SLR deductions on their infrastructure funds portfolios. This is a big booster, as it will result in 34-35 basis points savings in the margins of banks. On a portfolio of Rs 10 lakh crore, additional funds available with banks would be Rs 3,500 crores. The availability of funds for infrastructure will help revive stalled infrastructure projects, which will reduce non performing loans in the banking sector,” said Deven Choksey of K.R.Choksey Securities.
Vipul Dalal, corporate consultant pointed out that the budget proposal was to reduce tax litigation and increase tax revenue.
