When the Modi government stormed back to power in May, the stock market was the first to react. Both the Sensex and Nifty scaled lifetime highs in the expectation that a stable government will soon result in quick fixes for the economy losing steam, but the first Budget came as no less than a setback.
Markets plunged as soon as Finance Niramla Sitharaman announced the controversial tax surcharge on the Foreign Portfolio Investment (FPIs). Several other measures like amendments to the Companies Act to criminalize breach of corporate social responsibility norms came under sharp criticism from all quarters.
Indian markets witnessed one of the most fierce outflows of foreign funds since the global financial crisis in 2008. It not only erased most of the gains in the indices made post polls, but also the once made since January 1.