By and large the corporate sector has been spared the finance ministers attempts to raise resources to fund the massive increases in planned expenditures and the increases in defence and social sector spending.

The superb round of benefits that have been passed onto the other two heavyweights i.e. Reliance Industries and Tata Steel have been virtually ignored by the market. Reliance has been the beneficiary of higher import duties for its major product PTA in addition to that it can afford to hike prices of its basic polyester products.

In addition the fact that the financeminister chose not to hike corporate taxes in any manner was also ignored. Even those stocks in sectors such as software and capital goods which have benefited from the budget provisions had not gained at all by the time trading for the budget session ended. In fact, except for a brief tryst with higher prices from the likes of Satyam Computers software stocks collapsed, in keeping with the mood of the market.

The fertiliser sector has a mixed bag of goodies; while the subsidy on urea has been reduced by 10 per cent additional subsidies have been increased on pottassic fertilisers. In addition to that the selling price of urea has been increased by 10 per cent. Going by what happened the last time there was a 10 per cent price hike in urea there should be a positive impact on earnings as volumes did not fall then. The reduction in subsidies means, to that extent the fertiliser companies cash flows will improve as they will be additionally dependant on the market for their receipts.

The change in exciseduties on consumer products and branded products was a reasonable attempt to improve the duty structure in this industry. The trend in the FMCG segment has been one of effectively reducing the duties on consumer products. Since 1992-93 the excise on consumer products has been reduced from 120 per cent to 30 per cent last year.

As it is after the imposition of excise duties on MRP late last year the growth rates for the FMCG sector slowed down considerably (in the second half), this process can hopefully be stalled in the current year. In addition companies like Hindustan Lever and P&G should benefit from the reduction in duties on products such as shaving lotions, perfumes etc.

The much awaited benefits for the cement sector did not materialise, though the sector will benefit to the extent that the marginal imports of cement that had commenced should stop now. While the steel industry seems to have been partially benefited, with Tisco grabbing the lions share of the benefits, thanks to the one milliontonne expansion in its CRC capacities in Jamshedpur. This was due to the all round increase in customs duty by 8 per cent and over and above this the benefits given to the CR sector by increasing import duties to 30 per cent.

But the capital goods industry has been exempted from these hikes in customs duties and to that extent should be slightly more competitive. Though the stock price of L&T did not reflect this towards the close of trading, when it collapsed to Rs 263 after hitting a high of Rs 281.

The market reacted badly mainly due to unfulfilled expectations had hoped for a cut in excise duties for the cement and steel sectors. On the whole the budget was expected to be bullish as far as the market is concerned and in all probability was to focus on growth, while giving some additional benefits to the capital markets, in the form of buy back of shares and an increase in the creeping acquisition limits even though the companies bill was absent from the parliament agenda for the budget session. Butprotectionism was expected and was more than adequately delivered.

The run up to the budget was marked by serious optimism that the economy would get the kick start that it so badly required. This optimism was most widely reflected in the L&T stock. The engineering giant had it made in the sense that it has a big presence in infrastructure projects and also a presence in cement (in excess of ten million tonnes).

The stock rose to almost hit the circuit limit in the first session of trading on the BSE in anticipation that the company would be biggest beneficiary of any thrust on infrastructure development. L&T has already claimed that in the last one year infrastructure projects has driven growth and helped it earn better profits.

The 100 point rise in the Sensex in the pre-budget session seemed to be a little out of sync with reality as the market seemed over enthusiastic more than anything else. This over enthusiasm was evident in the badla rates over the weekend as well; where the rates rose over 21per cent; spurred on mainly by cement stocks such as ACC and Gujarat Ambuja Cements.

The over enthusiasm or rather the over anticipation of something revolutionary from the finance minister seems to have been unfounded as the relevant budget proposals turned out to be rather inadequate as far as the markets were concerned.

The entire euphoria had been wiped out thoroughly. What can only happen now is a more rational analysis of the budget provisions which can hold out hope for the sectors that have benefited such as capital goods, software and selectively so in steel and the cement sectors.