But there is no big bang, and the Budget takes little risk on contentious issues. These include (1) retrospective tax (committee resolutionno scrapping; (2) food/fuel subsidieswill re-haul, but is not specific; (3) land/labour lawsis not mentioned; (4) government bank ownership limitsambiguous on whether the limits are being lowered, and few specifics on mining/asset auctioning. There is a reasonable argument that it is early in the governments life to commit to specifics, some of this is not really needed (and not in the Budget in any case) or that market expectations are unrealistic. All fair, but excluding these, this Budget is not a radical departure from the norm, and there is a case to see this Budget glass as half empty.
There are many more winnersa few specific, others generic in nature. The bigger and clearer winners are (a) banks/financial servicesacross infrastructure funding breaks, opening up of insurance, savings incentives; (b) Infrastructure sectordirect spending, financing, focus and some policy; (c) Real estatemortgage breaks, REITs, mass-housing and, of course, the common mansmall breaks on income tax, savings, and in case mortgages. There are those that dont get hurt as much as they could have (cigarettes), and there are those that miss out (oil reform, gold duty relaxation), but the largesse is fairly spread. The question isif theres almost no pain for any segment, how much will be the gain
We believe a slowly upping economic cycle, market and capital risk appetite, and a Budget that meets (not beats) high market expectations is moderately market supportive. It does, though, shift the markets next leg to real economic-activity/earnings or policy (beyond the Budget). We remain positively biased on the equity market.