The BSE Sensex traded 124 points or 0.65 per cent lower at 19,023, while the Nifty declined 47 points to 5,750 as of 2.30 p.m. on Thursday. The rupee fell against the U.S. dollar, trading at 54.18 from levels of around 53.70 before the budget.
Markets were disappointed after the 2012-13 Budget proposed increasing some corporate and individual taxes and after securities transaction tax was lowered but not eliminated.
Total budget expenditure will rise by an unexpectedly high 16 percent in the fiscal year that begins on April 1 to 16.65 trillion rupees, even as the fiscal deficit for the current year will fall to 5.2 percent of gross domestic product, besting a revised target of 5.3 percent.
The bigger-than-expected outlay for the coming fiscal year will be funded by higher revenue including new taxes on the rich and large companies. Uday Kotak, executive VC & MD of Kotak Mahindra Bank said profitable corporates will have to pay a higher corporate tax.