There were no nasty surprises in the form of populist measures from the Interim Budget, but the government seems to be trying to reach out the corporate sector and the middle class as evident from some of the indirect tax incentives.
Chidambaram is also likely to highlight the Congress party-led United Progressive Alliance government's achievements and outline the vision for the future. The main budget for the financial year 2014-15 will be presented by the new government that will come into power after the general elections due by May.
In a speech marred by angry protests by lawmakers over the Telangana issue, the Minister, as expected, refrained from any decision on revising passenger or freight fares. After announcing some new trains, the minister largely stuck to presenting the accounts of the previous year and made forecasts for the next financial year.
"Personally, my own strategy is to buy the dips. So with recent correction, we actually are highlighting India now as one of the four cheapest markets in the region," Sakthi Siva of Credit Suisse told CNBC-TV18 in an interview.
India has all the requirements to return to a GDP growth-rate of 8 percent in the coming years, deputy chairman of the Planning Commission Montek Singh Ahluwalia said, while highlighting that current account deficit is a big problem right now.
While presenting the tax proposals in the Budget 2013-14, the Finance Minister set the context by stating that the underlying theme of his proposals is to bring clarity in tax laws, stability in tax regime, provide a non-adversarial tax administration and a fair dispute resolution mechanism.
It is not a flamboyant or even a populist Budget, as many would have expected, for the simple reason that early next year the country goes for the General Elections and Finance Minister P. Chidambarams chief concern seemed to be reducing fiscal deficit than curbing inflation.
Measures for further expanding and deepening financial markets and facilitating foreign participation have also been announced. The budget is one part of overall economic policymaking and the budget presented today is a certainly a step forward in the series of initiatives announced by the government in recent months.
This years budget is a workman-like balancing act and the government has done a decent job given the challenges in the economy. On the positive side we are happy to see the delivery on the fiscal promise-estimate at 5.2% FY13 & 4.8% FY14 but lack of further visibility on policy initiatives for the coming months is a disappointment.
Given the fact that elections are just round the corner and the grim macro-economic scenario, the Finance Minister has done a fairly commendable job. He has resisted the temptation to announce a populist budget.
Insurance companies are now empowered to open branches in tier II cities without prior IRDA approval which is a good move and would facilitate penetration without much lag, except that there needs to be more clarity on the definition of Tier II markets.
Overall, the theme of the budget is directed towards growth momentum of the Indian economy as a long term measure and also providing stability and certainty of tax laws to boost investors confidence in India as investment destination.