Today is the Big Budget Day| Budget 2009

The government is likely to set an aggressive disinvestment target. About 10-15% could be offloaded in some government held companies. National Hydro Power Corporation and Oil India are on government’s list. Apart from that, action on raising limits of FDI cap in select sectors is also expected. As suggested by the economic survey, the fiscal stimulus package is likely to be extended. Sources say a stimulus of 0.5 to 1% is possible.

Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia said that he hope that there will soon be a medium term program for disinvestment. Government equity will remain 51%, whether they will disinvest the rest. Tax reforms are extremely important part of the agenda. The President’s address also mentions it.

India Inc’s expectations are fairly tempered as they realize that the government is working within fiscal constraints. The corporate want to see government’s plans on liberalization and more foreign investment. They want to see government articulate about disinvestment, labor laws, layout roadmap of abolition of FBT, STT & CTT which was never notified.

The corporate expect the sops introduced in first 3 stimulus packages to continue. It feels that there could be more coming in for exporters, as the government is in wait & watch mode. Further stimulus could be announced post September.

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