Great Indian budget to be presented tomorrow

Tomorrow would definitely be a big day for investors, industrialists and the Modi government in India. The Union budget is to be presented tomorrow.

• Good news is that investors will be able to buy & sell shares as the stock market will remain open, despite it being a usual holiday.

• Investors have parked a lot of money in Indian stocks and bonds since the new government came to power last year and will try to assess how firm the government is over its promise of reform.

• The new government so far failed to enact any major policy change as it lacks majority in the upper house of the parliament, so will try to push for significant impact over its union budget tomorrow.

• Despite so, recent survey shows that the economists have so far put India as a top reformer last year.

Expectation and reaction -

• India needs deep investment in its infrastructure, especially in roads, ports and electricity and focus will be on that.

• Focus will also be on how the government is going to rationalize its subsidy bills which could be much lesser this year due to crude price.

• Most of the focus will remain on the area of regulation and how successful the government will be in removing hurdles that ranks India as 142nd among nations to do business according to World Bank.

• If successful the market will be cheering a lot and the bonds and the rupee will continue to outperform peers.

• INR is already celebrating over the rail budget gaining against all the majors including the dollar. Similar trend is expected to continue ahead.