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Impact of Union Budget: Rs. 5 lakh crore market capitalization eroded

Impact of Union Budget: Rs. 5 lakh crore market capitalization eroded

New Delhi: Market capitalization of Bombay Stock Exchange (BSE) went down by around 5 lakh crores in two sessions on Friday and Monday.

According to the report published in Asianage, Union Budget had disappointed the market which has resulted in massive sell-off.

On Friday, the Sensex had declined by 394.67 points whereas, on Monday, the index had dropped by 793 points. Due to this, the market capitalization dropped to Rs. 1,47,96,302.89 crore on Monday.

Out of 30 companies, the share prices of 27 were seen in red. They faced sell-off pressure.

It may be mentioned that during the budget speech, Union Minister of Finance, Ms. Nirmala Sitharaman had proposed to increase surcharge from 15 percent to 25 percent on taxable income between Rs 2-5 crore, and from 15 percent to 37 percent for income above Rs 5 crore.

Following the increase in surcharge, the effective income tax rate for individuals with taxable income of Rs 2-5 crore will go up from 35.88 percent to 39 percent, and for those above Rs 5 crore, it would go up to 42.7 percent.

According to traders, the Union Budget proposal on higher tax incidence for foreign portfolio investors and high networth individuals also continued to spook domestic investors.

The other proposals in the Budget to increase the minimum public shareholding levels to 35 percent was a dampener and, along with a 20 percent tax on share buybacks, equal contributors to the sell-offs.

With inputs from IANS

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