Why stock markets were subdued after Indian Budget 2010?

The finance minister has increased Minimum Alternate Tax (MAT) from the current 15% of book profits to 18% of book profits.Currently, domestic firms earning total income of over a crore in a year have to pay corporate tax of 30%. Besides, surcharge of 10% and education cess of 3% are imposed on them, taking the total tax liability to 33.99%. Now, this comes down slightly to 33.2175%.

So, as the corporates have not gained much it is obvious that there would be fluctuations in the share market.

Budjet 2010-11 proposal to hike excise duty by 2% on manufactured goods, petroleum price hike, inflation effect of the existing budjet over the running inflation, increse in MAT by 3% etc may effect the stock market's stability.

The markets were not subdued. It rose 800 points and then fell 400 points and ended up positive. There were not many grinders in the budget. The balance is maintained, but the revenue collection is only 50% making the deficit 10% of gdp.

Now the what the government has to do is improve the rvenue, may be by stimulating better corporate performance. This is the only way we can have a balance. Else probably they can borrow and keep the interest rates up which can affect the corporate performance especially the construction industry. I feel the interest rates are little subdued. Probably it has to go up than down and make the players live with higher rates. We cannot play with interest rates too much because our economy is inefficient unlike othere coutnries developed. May be too much sops to industries can create sloth in them which will be counterproductive in the long run. So probably we will have to live with such predicaments till the government learns to run the country on a mission stated basis and everything working around those mission statement. Randomly run missions can create such situations where policies cannot be enacted for fear of causing other externalities.