This paper examines the effect of Union Budgets from 2001 to 2012 on the Stock Market as represented by Nifty in terms of returns and volatility. The effect on Nifty has been studied prior to and subsequent to budget day. The periods have been separated into short-term, medium-term, and long-term periods. With regard to return the result proves that budgets have the maximum effect in the short term period, with some effect extending into the medium-term and no significant effect at all on long- term average returns. With regard to volatility the result indicates that the long term period after the budget tends to be more volatile than the medium-term and the short-term periods when compared to similar long-term before the budget.
Union Budget, Stock market, IndexNifty, Budget and Nifty
