Budget 2018-19 has been a balancing act to maintain fiscal discipline whilst focusing on the rural and agriculture needs.

Fiscal deficit target and GDP growth target look realistic whilst fund flows to important sectors such as infrastructure remain supportive. Execution will be the key now as the numbers are large and slippages can have adverse impact on the interest rates and bond yields.

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Executive summary
Union Budget is an important event that impacts the stock market in the short term as well as the long term, by bringing tax and policy reforms along with sector-specific announcements.

However, the market performance is also dependent on various macro-economic scenarios other than the Budget, which may include international events, domestic political scenario, commodity prices and consumption factor. Hence, investors must look at market opportunities with a broader horizon.

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The year gone by

India emerged as the one of the fastest growing economy in the world in 2017-18,
with the Government of India estimating GDP growth of 6.75% for the
full fiscal year. The GDP growth rate forecasted for the
fiscal year 2018-19 is between 7.0% and 7.5%.

Changes and relaxations in Goods and Services Tax (GST)

The Goods and Services Tax Council was constituted by Article 279A and came into effect from September 12, 2016, for oversight and administration of GST implementation in India. Since then, the Council has met 25 times.

Performance of stock market in the past year

NSE NIFTY 50 Index and BSE Sensex have witnessed an upward trend in the past one year with NIFTY up by 29% and Sensex up by 28%. This increase has largely been driven by better economic policies, stimulating government reforms, improvement in corporate earnings and an overall positive global environment.

Key reforms in India in past quarter

The RBI kept the repo rate unchanged at 6.0% due to concerns over rising inflation and increasing global crude oil prices.

The Government of India plans to infuse more than INR 88,000 crore into public sector banks (PSBs) in FY2018 itself out of its INR 2.11 lakh crore recapitalisation program for PSBs.

Global growth

India’s position amongst leading economies

November 08, 2017, marked the one-year anniversary of not only demonetisation but also the election of Donald Trump as the President of the United States. It has been a year since he assumed office with the campaign slogan ‘Make America Great Again’, and a number of global changes have taken place since then.