It created a sense of deja vu for investors. There were high expectations of tax cuts and another stimulus package for some sectors like real estate and housing in the interim Budget, but it turned out to be a non-event. As the pre-budget hype evaporated in a matter of an hour after acting finance minister Pranab Mukherjee presented his interim budget for the UPA government on Monday, stock markets came back to their senses and the Sensex plunged by 329 points, or 3.4 per cent, to 9305.45.

Five years ago, on February 3, 2004, the then finance minister Jaswant Singh’s interim budget for 2004-05 had stirred many hopes and offered new visions. However, by and large, it too turned out to be just another Vote-on-Accounts. Disappointed with the NDA government’s interim budget, the Sensex then ended with a loss of 75 points, or 1.31 per cent, at 5,620.98, recording its fourth straight fall. Like 2009, it was also mostly about achievements during the government’s tenure and did not promise many new sops. Both interim budgets did not have any announcements of significance on the tax front either.

However, there was one positive announcement for investors in 2004 — long-term capital gains tax was extended for another three years. Other indirect positives included the fact that fiscal deficit came down and was estimated at 4.8 per cent of the GDP in 2004-05 as against a budget estimate of 5.6 per cent.

Come 2009, the market is worried about the budget deficit which is running at 6 per cent of GDP. “Accounting for state deficits and off-balance sheet items would take deficit up to around 10 per cent of GDP. We must question the composition of our expenditure. How much are we spending on building infrastructure, or creating jobs?” said Ambit Corporate Finance MD and CEO-designate Sanjay Sakhuja.

... contd.