Mutual Fund Budget Preview 2009-10

After sweeping the General Elections convincingly, the time has come for the new government to deliver for what it was elected. On July 6, the Finance Minister will present the Budget for 2009-10. This will be indicative of the action plan of the newly elected government. We believe the Budget 2009-10 will be a reform-oriented one with major focus on improving GDP growth. However, it will be unrealistic to assume that the Budget will deliver everything. Rather, it will set the tone for the impetus to growth.

This year’s Budget will be different for the following reasons:

• Execution will be smooth since the Congress is the largest party in the coalition. This will lead to efficient execution of policy decisions. Also, the Congress is in charge of most of the important ministries
• Growth will be the main prerogative of the government. The growth will be more inclusive in nature targeting social development with a focus on employment generation, thrust on education and rural development
• Maintenance of fiscal prudence

Key expectations from the Budget:

• Improvement in fiscal management/public finances via disinvestments
  Increased focus on infrastructure spending especially power and road/highways
• Thrust on agriculture, rural development and employment generation.
  Financial sector reforms like increasing FDI in retail and insurance sector
• Increased focus on education and healthcare
• Providing ample liquidity to corporates and individuals at affordable rates

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