I feel that overall the budget is good, though it cannot be termed as an excellent one. The fiscal deficit of 4.8 % proposal appears realistic and the dedicated debt exchange would deepen the bond market. The increased allocation for social sector as well as food security too will benefit the poor in a big way. The extension of 4% farm loan to private bank has also given level play in field to private banks.

Moreover, the investment allowance of 15 % on investment above 100 crores, increased allocation for rural and urban housing, development of 3000 kms of road, credit enhancement by IIFCL to companies, additional  tax cut of Rs 1 lakh in respect of investment on home loans up to Rs 25 lakhs, exemption of  custom duty on import of machinery and semi conductors would encourage investments yet,  I  feel that the budget has not given any incentives for savings.

While the budget has been good for capital market and mutual funds, it could be termed as a disappointment for the IT payers as the effect of inflation has not been reckoned. The proposal to impose surcharge to those who assess in high income bracket could have been avoided. Instead, the tax base should have been increased by bringing more people, including agriculturist with substantial income, also into the tax net.

In addition, though, the simplification of procedures by SEBI for FIIS will surely encourage FDI, allowing FIIs in currency derivates would only add to the volatility of the market.