Kudos for resisting the populist urge, Mr FM

At a time when the political winds had become difficult for the FM, he has held his ground and not yielded by bringing in populist measures.

He has continued with low-key reforms such as phasing out central sales tax, permitting short selling and stock lending. Important decisions have been buying out State Bank of India''s stake from Reserve Bank of India at 20-per cent premium to market price and continuing with textile upgradation fund.

These have of course not been adequate considering that this was the last budget where reform measures could have been bought in and that damage to sentiment of growth has been greater as actually stock prices have fallen disproportionately than the dent in fundamentals.

The actual impact of tax measures such as increase in excise duty on cement or taxing IT companies is going to be only marginal. Cement companies make handsome profits and in all likelihood will lose from the burden. And IT companies already pay 8 per cent to 14 per cent local and foreign income tax and hit to the bottom line will therefore not be more than 3 per cent to 5 per cent depending on how much credit they will get for the taxes paid abroad.

Dividend distribution tax increase will hurt but not kill. If things stabilize next year you could see roll back and also drop in tax surcharge.

But look at the upsides. The country''s fiscal position has consolidated and we can look forward to controlled fiscal deficits at the centre and the state. The markets and the economy do not need much and we should learn to go ahead as big boys that we are.