Dalal Street

Bulls in control on Dalal Street on Budget Day

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Indian shares ended on a strong note on Dalal Street on Tuesday (Feb. 1) as investors gave a thumbs up to a growth-oriented Budget unveiled in Parliament today.

The 30-share BSE Sensex closed up 1.46% to 58,862.57 points while the broader NSE Nifty index end the volatile trading session up 237 points, or 1.37% at 17,576.85 points. Both indices had slumped earlier before staging a quick recovery. Shares of Larsen & Toubro, Shree Cement, IndusInd Bank, Sun Pharma and Tata Steel soared 4-7% in the Nifty pack.

Underlying sentiment was supported after the Wall Street put up a strong show overnight and data showed India’s economy contracted less than expected in the 2020-21 fiscal year.

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Gross domestic product decreased a real 6.6% in the fiscal year ended March 31, 2021, revised figures from the statistics ministry showed Monday. In May 2021, the ministry had estimated a 7.3%.

In the latest annual Economic Survey, released earlier on Monday, the government projected GDP expansion of 9.2% for fiscal year 2021-22. The government also estimated growth of 8-8.5% for fiscal 2023.

Dalal street welcomed Finance Minister Nirmala Sitharaman’s 39.45 trillion rupee ($529.7 billion) Budget that aims to put the economy on an accelerated growth path after the impact caused by the Covid and rising inflation.

Asia’s third-largest economy will allocate trillions of rupees to highways, affordable housing and solar equipment manufacturing to put growth on a firmer footing Sitharaman said.

In addition to that, Sitharaman announced that the Reserve Bank of India (RBI) will start issuing a digital rupee later this year.

“Introduction of a central bank digital currency will give a big boost to the digital economy. Digital currency will also lead to a more efficient and cheap currency management system.”

She also noted that the launch of the digital rupee will be carried out using blockchain and that income from virtual digital assets will be taxed at 30%-the highest tax band in the country.

“It’s a big bang budget, but depends on where one stands on the bang perimeter. The massive ramp-up of capital spending and focus on infrastructure cements the budget’s credentials as a firmly growth-oriented one,” Aurodeep Nandi, India Economist and Vice President at Nomura told Reuters.