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Why markets don't like Pranab babu
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India’s stock market nose-dived after finance minister Pranab Mukherjee completed his nearly two-hour-long budget speech in Parliament on Monday. Why did the Sensex plunge 869 points when the FM did not do anything negative in terms of imposing new taxes on the corporate world?

In fact, he surprised businesses on the upside by not rolling back the 4% central excise duty cut effected over the past several months as part of a massive fiscal stimulus to deal with the economic recession engulfing the developed and many developing economies. India, of course, survived the deep recession and registered 6.7% GDP growth during 2008-09.

Mr Mukherjee also removed the much-disliked Fringe Benefit Tax which was a thorn in corporate India’s flesh. He gave an even higher fiscal boost by increasing plan expenditure substantially. The total expenditure he had earmarked in his interim budget barely a month before the general elections was Rs 9,53,000 crore. He increased this to Rs 10,20,000 crore in the full budget he presented on Monday. He increased allocations for various social sector projects in a big way. He tried to throw goodies at everybody. Yet the stock market gave him thumbs down. Why?

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