What the market liked

The Interim Union Budget for 2019-2020, though expected to be an election budget, was finely balanced and financial discipline was maintained. While sops have been given to the deserving, no rhetoric has been resorted to.  Farmers owning up to 2 hectares of land will be given R6,000 per year in three installments. This will help him prepare his field for the coming season and will cost the government Rs 75,000 crore a year. This is a far better measure than a farm loan waiver of Rs 13 lakh crore, which the Opposition was demanding.

Similarly, the tax-free bracket for middle-class income earners has been doubled to  Rs 5 lakh. Further, the standard deduction has been raised from Rs 40,000 to R50,000 for salaried people. There is a deduction of up to Rs 1.5 lakh for investments under Section 80C, which continues.

Workers from the unorganised sector would be eligible for a pension post attaining 60 years of age on payment of Rs 100 per month. There are many other small and well-thought-out features in the budget, and it is clear the government has the elections at the back of the mind.

What the market liked and gave a thumbs up to was the fact that the maths of the increased expenditure of 1 lakh crore would come from higher divestment, dividend from RBI and tax buoyancy. At worst, there may be a shortfall in the tax buoyancy predicted, moving the deficit from 3.1 percent to, say, 3.5 percent. Considering it is the election budget, this is acceptable.