IMPACT ON ECONOMY
The budget can be seen as neutral. Many more measures would be needed to attain 3.7% target for FY16. Phased subsidy cuts will be needed to get below the 2% target 
FM keeps 4.5% Fiscal deficit target for FY15 which is realistic but gives a highly optimistic target of 3.7% and 3% in FY16 and FY17 respectively. Given the subsidy allocations which were above 2% of GDP in FY14, FM has made no major subsidy cuts. The interest subsidy has been increased by 3 percent points; also the target for farm credit has been set to Rs.8 lakh crores for FY15. Many allocations have also been made. FM pegs revenue gap for FY15 at 2.9%. The planned allocation is up 29.7%. The estimates by FM remain neutral for the economy.
On the revenue front, FM has increased the tax exemption limit marginally by Rs.50000 which will mildly lower receipts of Govt. Also, increase in 80 C to Rs.150, 000 will motivate savings which can act as driver for the reviving the economy. Leaving direct tax rate unchanged is a positive move as this will help maintain receipts from taxes so that fiscal deficit target is achieved. Various excise duty cuts comes as a positive since it help control inflation. Tax holidays of 10 year to important sectors like power is seen as a good move. FM also indicated an increase in indirect taxes revenue.
FDI proposals in Defense, insurance, healthcare is welcome but more clarity is required on Retrospective taxation and on schemes like NREGA productivity, Urea policy and GST approval.
CAPITAL MARKETS OUTLOOK
FM proposed a number of measures to energize Indian capital market. Easing of policies will boost the markets. Overall, the budget is perceived to be in the right direction, with its emphasis on sustainable growth. Proposal to strengthen and modernize financial sector regulatory system is seen as a positive step. This would help the markets to grow in the long term.
FM said that he’s aiming at sustained growth of 7-8% in next 3-4 years. The Sensex rose over 100 points after this comment. Various reforms in different sectors such as insurance, infrastructure, real estate, agriculture and banking sector will help the capital markets in the long term.
Reforms whereby banks will be allowed to give long term loans to infrastructure and development of infrastructure will help in increase of banks stock prices. Higher tax exemption limit of 2.5 lakhs will increase disposable income available to consumers and in turn help the manufacturing sector companies. Reforms in REITs will support the realty stocks. Rise in the stocks of consumer centric companies is seen as a result of the budget. Increase in FDI to 49% in insurance sector showed a mixed movement in the stock prices.