It was definitely not a very good budget for the retail investors. Before the budget, there were lots of expectations and hype, which went down in the drain.
Arun Jaitley announced for long-term capital gains tax of 10 percent for gains exceeding Rs 1 lakh that arises from the sale of listed equity shares or units of equity-oriented mutual funds. This can really affect the retail investors entering the equity markets through mutual fund. No wonder, Sensex and Nifty are down and more pain is expected ahead for the investors.
Now there are few things that one must keep in mind. Economic survey 2018, under Chief Economic Advisor Arvind Subramanian has said that there’s bubble kind of situation in the stock market. So, if that’s really the case, union budget could have made this situation even worse. Another thing to note is that it’s not just the Indian stock market. Things are bad on the global scene. The market has crashed—although many believe this is just an abrupt and large correction. So this has cascading affect in India, which has plunged Sensex and Nifty down.
In the long run, things would be fine, although the threat of a possible bubble could a cause of worry for many. This calls in for high caution from the investors. Remember, whatever the Finance Minster has announced, those announcements will eventually simmer down, and as we move closer to the General election, the political atmosphere in the country will come to play a major role in how the stock market pans out.