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Investors anxiously waiting for budget

LIKE MILLIONS across the country, shareholders in Bhopal are waiting for the Union Budget with their fingers crossed. Although the Economic Survey projecting 8.1 per cent growth rate presented by the Union Finance Minister P Chidambaram has enthused the market, investors in Bhopal are still circumspect.

india Updated: Feb 28, 2006 15:54 IST

LIKE MILLIONS across the country, shareholders in Bhopal are waiting for the Union Budget with their fingers crossed. Although the Economic Survey projecting 8.1 per cent growth rate presented by the Union Finance Minister P Chidambaram has enthused the market, investors in Bhopal are still circumspect.

“We’re not expecting much from the budget but if it turns out to be a good one, the stock market will shoot up,” commented president, Bhopal Stock Investors’ Association, Santosh Agarwal. The Bombay Stock Exchange (BSE) today closed with 90-point increase in the Sensex.

But, as investors pointed out, the economic survey is fraught with the risk of inflationary trend, though its outlook generally is rosy.

Agrawal said since investors in Bhopal are not very optimistic, they have eschewed from big investment in view of the unpredictability of the budget. According to Agarwal, certain issues like fringe-benefit tax (FBT), transaction tax, corporate tax and service tax would be determining factors for the market.

“Several associations have submitted memoranda to the FM for abolishing FBT, as it has been found to have an adverse impact on the corporate sector,” he remarked.

Terming the day’s market to be positive, a City investor said if rationalisation of taxes or lowering of FBT or corporate tax is brought about in the budget, the stock market would positively react. “But, if tax rates go up, they would act as a dampener,” he pointed out.

A remarkable change that has been witnessed in the City is the heightened interest of people towards Union budget. “Earlier it wasn’t so, but in past few years, common man as well as investors are quite enthusiastically aware about the budget and its repercussions in the stock market, which is a good sign,” says Agarwal.

Adding further Agarwal said, even if taxes are not hiked and a status quo is maintained to the current position, the market is likely to grow.

First Published: Feb 28, 2006 15:54 IST