Indian share market looks up to budget

Mumbai, February 25:

India’s share market is hoping that the general budget for the next fiscal year will significantly hike investment in infrastructure development and further open up the economy for foreign investors.

With a couple of days to go for the unveiling of the annual union budget for 2006-07, expectations that the Left-backed United Progressive Alliance government would carry forward the reforms and growth agenda are running high in the stock markets.

Finance minister P Chidambaram will present the government’s second general budget for the next fiscal in parliament Tuesday. While favouring a greater emphasis on infrastructure,

rationalisation of taxes and opening up of key sectors like banking for overseas investments, analysts say the budget should attempt to maintain the prevailing market momentum.

“With the key share index already trading at a record high and massive overseas investments flowing in, the market is not looking for anything specific this year,” said K K Mittal, vice-president of Escorts Mutual Fund.

“The main thrust of the budget should be on boosting economic growth and cutting the high fiscal deficit. This, in turn, will further strengthen the capital market,” Mittal said.

“The general feeling is that the momentum of the market will not be disturbed by announcing some negative proposals,” he added.