The Union Budget put forth by Finance Minister Arun Jaitley was broadly in line with expectations, said Robert Parker, senior advisor at Credit Suisse. The budget acknowledged that the government's decision to demonetise old high-value currency notes was indeed disruptive to the economy and outlined appropriate policy responses, he added.
Among the key policy measures was the injection of funds into the rural economy, which was probably the worst hit by the cash ban.
Parker also pointed to the allocation towards bank recapitalisation, as the government's recognition of the deepening bad loans problem, though it's debatable if the amount was sufficient.
The third crucial factor in the Union Budget was the increasing focus on the need to boost investments in the infrastructure sector, he said.
The government's fiscal deficit target of 3.2 percent of the GDP for financial year 2017-18 would not worry investors, according to Parker. But whether the target is achieved is something that both global and domestic investors would closely watch, he added.
The budget, though, is unlikely to act as a catalyst for any significant rally in the Indian equity market.
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