• The vote-on-account, with impending general elections, stuck to convention and did not contain any major announcements / initiatives.
• Revised FY09 revenue and fiscal deficits are estimated at 4.4% and 6%, respectively - significantly above the budgeted levels, but in line with consensus estimates
• Fiscal deficit for FY10 is budgeted at 5.5% and revenue deficit at 4% of GDP; Budget assumes a 10% rise in corporation tax and a similar rise in income tax in FY10, which may be challenging to achieve in the backdrop of a weak economic environment.
• No sector specific incentives announced except extension of interest rate subsidy for labour intensive export operations. Major initiatives to be taken up only in the full budget to be unveiled by the new Government, post elections
• With no major triggers in the near term, markets will now look at the elections and international factors over the next two months. Monetary measures, if any, will have an impact in the intermediate term.