‘Market Swings Don’t Define a Budget’s Success’: Sanjeev Sanyal

• Sanjeev Sanyal says one-day market fall is not a verdict on Budget outcomes
• Defends stock transaction tax hike amid ₹10 lakh crore wealth erosion
• Highlights fiscal deficit glide path and debt-to-GDP correction
• Stresses importance of “boring but vital” process reforms

GG News Bureau
New Delhi, 2nd Feb: Dismissing the sharp market sell-off following the Union Budget 2026, Sanjeev Sanyal, Economic Advisor to Narendra Modi, said that a negative one-day market reaction should not be seen as an indicator of the Budget’s real impact.

Speaking in an exclusive interview to NDTV, Sanyal said markets often fluctuate and such movements do not reliably reflect how Budget measures play out over time. His remarks came a day after markets fell nearly 2 per cent, wiping out close to ₹10 lakh crore in investor wealth, a reaction that the Opposition described as proof of a “disappointing Budget”.

The sell-off was widely attributed to proposals announced by Finance Minister Nirmala Sitharaman, including a hike in transaction tax on stock trades.

“Markets go up and down,” Sanyal said. “If you look at the market reaction of the last 50 Budgets, it is not at all clear that the response on that particular day is an indicator of how things eventually panned out. As someone who spent a quarter of a century in financial markets, I don’t get too worked up about movements on any specific day.”

Describing the Budget as a “workmanlike” exercise, Sanyal said it focused on areas that economists value but may not immediately excite the public. He pointed to the steady correction in fiscal parameters after the Covid-induced surge in government borrowing.

“The fiscal deficit, which went up sharply after Covid, has been systematically brought under control. In the coming financial year, it will be around 4.3 per cent, and in the next few years we hope to bring it below 4 per cent,” he said.

He also highlighted progress on debt sustainability. “The debt-to-GDP ratio is now on course at about 56 per cent, and by the end of the decade it should again fall below 50 per cent. This is no small achievement when most countries—developed and developing—are seeing debt ratios spiral out of control,” Sanyal noted.

Addressing criticism that the Budget lacked “big bang” reforms, Sanyal said transformative change does not happen every year. “A lot of reform is about process reform. It’s the boring nuts and bolts,” he said, urging observers to look beyond the Budget speech to the detailed documents.

He cited multiple incremental changes in areas such as customs administration and income tax rules, including technology-driven systems to speed up imports and exports and the removal of procedural frictions that had enabled harassment and rent-seeking.

“These small reforms don’t make headlines,” Sanyal said, “but over time, they fundamentally improve how the economy functions.”