India’s annual Union budget has seemingly lost its significance and impact on the market, but every year there is considerable build up, especially, in the media towards expectations from the government. Major announcements used to be made on Budget Day, but in today’s times the government does not wait for the budget to announce reforms. Hence, the budget has become a rather tepid affair.
Equity markets react for a few hours on budget announcements and then get back to worrying about other general events impacting the market. The bond market though has a slightly deeper link to the budget. In layman’s terms a budget is a statement of accounts with a forecast on what you are likely to earn and what you are likely to spend in the coming financial year.
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