Pawan Jain, Chairman - ASHIKA Group

Recent government move is clearly indicative of the fact that this year the major focus area would be to cut down the fiscal deficit and to gradually get on and lay out plan for fiscal consolidation. Hence, rollback of excise and duty cuts, bringing more services under the tax bracket, aggressive divestment, trimming off of subsidy burden and lowering spending on social schemes to a larger extent would be the focus area in the Union Budget. As far as divestment goes, government is expected to mop up Rs.250bn by March 2010. Budget 2010 would see greater push for divestment with a target to mop up Rs.450 to 500 billion by the end of next fiscal. Some of the Parikh committee recommendation atleast in terms of freeing the petrol prices and some of the petroleum products could well help the government in tinkering the subsidy burden to a large extent and as well set the pace for long awaited change in the policy structure to the OMC sector as a whole. As we have already seen just before the budget with some structural policy changes in the fertilizer sector, government's intention in terms of taking some of the longstanding key policy issues would be a key trigger for the market to watch out for. Structural reforms relating to retail, labor, pension funds and insurance would be key areas which the market would like being addressed by the finance minister. FDI and FII norms in select sectors like aviation, retail, insurance, media is long awaited. Thrust area for the budget would be infrastructure (Power, Roads, Airports, Port, Highways etc.) Above all, a roadmap for implementation of GST would be keenly watched for.

Pawan Jain
Chairman - ASHIKA Group
http://www.ashikagroup.com/
Kolkata # 033-22891556
Mumbai # 022-66111701
M: 9830049008.