Avinash Gupta, AVP-Equity Research,Bonanza

Investors would examine the budget for FY12 not to see the precise numbers but the bigger picture that the Government paints. They are expecting the budget to initiate measures to retain the growth momentum which has been showing signs of slackening while containing inflation. The infrastructure sector has potential to contribute significantly to growth. Investment in Infrastructure would improve the productivity in the economy. The bottlenecks which are hindering the investment in the sector would be addressed. The structure to raise long term funds may be addressed. There is a crying need to improve the productivity in the agriculture. The investors recall that in May 2009, after the elections, it was thought that Government would implement reforms at a fast pace. Investors are disappointed that most of the reforms relating to prevention of leakage of Government funds, subsidies, administration, taxation etc are stuck. Investors look forward to the action on the ground. Coming to the numbers it is expected that there would not be any significant mobilization through fresh levies. The ability of the economy to absorb higher taxes is limited. Higher level of taxation can stunt growth. Continued buoyancy in tax collection coupled with efforts to cut down subsidies would help government meet the Fiscal Targets.