Budget based on fiscal stability, tax reforms, growth: LKP

The report says, "The Union Budget FY'2010-11 has clearly charted out the path towards fiscal prudence and consolidation keeping in mind the growth objective and social obligations for inclusive growth. The government has allayed fears of borrowings crowding out private investment and has raised hopes of rolling out GST and DTC by April 2011. Reduction in personal taxation would in our view leave more money with the consumers and would spur consumption."

"The budget has been built around three pillars - Fiscal Stability, Road Map for moving towards more tax reforms and Inclusive Growth with focus on agriculture, infrastructure and social sector. The divestment target of Rs 400 billion is a signal for further reforms over and above the Rs 250 billion expected for FY'10. For Corporate India although the increase in MAT and cut in corporate tax surcharge would balance a bit, we believe that although costs could increase due to increased fuel costs, the higher growth would lead to a possible upside in earnings going forward," according to LKP Securities report.

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