TAKAHARI OGAWA, ANALYST, STANDARD AND POOR'S RATING AGENCY
Ogawa said the size of the country's fiscal deficit was within the expected boundary, after India announced its fiscal deficit would widen as it outlined increased spending. However the lack of details about fiscal consolidation and privatisation was disappointing, Ogawa told Reuters in an interview.
SEBASTIEN BARBE, HEAD OF EM RESEARCH AND STRATEGY, CALYON, HONG KONG
"The government was elected on a pro-growth and pro-poor programme so I don't think they are going to make a big move in terms of reducing the fiscal deficit in the short term.
Beyond the short term outlook for the fiscal deficit what could be of interest is whether or not the government suggests some sort of precise and detailed roadmap to come back to a more controlled fiscal deficit. If they commit themselves to reduce the fiscal deficit in the next, say, 3 years to something closer to 3.5-4 percent of GDP, the market is likely not to be too harsh on the government. A large fiscal deficit is already priced in.
If they just announce a large fiscal deficit without a committment to a control in fiscal performance, there is a risk of a sovereign downgrade. But if they take strong commitments, I am not sure there will be a downgrade."
S. SRINIVASA RAGHAVAN, TREASURY HEAD, IDBI GILTS, MUMBAI:
"The budget is not up to the expectations and disappointing, too. They are saying that the fiscal deficit is manageable, but we have to wait and see how they are going to do that.
"The federal borrowing for the fiscal year at more than 4.5 trillion rupees, coupled with the state governments' share is going to be a huge burden for the market. Bond prices have come down already and we can expect some more falls."
JIGAR SHAH, SENIOR VICE-PRESIDENT AT KIM ENG SECURITIES IN MUMBAI
"The budget is good if we view it against the prevailing economic scenario, in India as well as globally. The budget is directed towards increasing demand, by leaving key tax rates unchanged. It was silent as to policy actions like (how to) increase foreign investment and stake sales in government units. That aspect isdisappointing."
KIRAN MAZUMDAR-SHAW, CHAIRMAN AND MANAGING DIRECTOR, BIOCON LTD
"It's not a bold budget. It's not such a great budget which will give a fillip to the industry. I was expecting many bolder reforms would be announced. There should have been much larger outlay for infrastructure and power. I am also disappointed that the budget had nothing substantial for the healthcare sector."
DEEPAK JASANI, HEAD OF RETAIL RESEARCH, HDFC SECURITIES, MUMBAI:
"There is a mismatch between market expectations and what was delivered. There were hopes the government would be bolder, but it has only gone for spending route and expecting things to take care of themselves.
"On most counts, there are a lot of general statements of intent, without any specific targets or timelines.
SUJAN HAJRA, CHIEF ECONOMIST, ANAND RATHI SECURITIES, MUMBAI:
"The budget is more on the populist side and seems to address immediate rather than longer-term problems. Both the expenditure overrun and relief on the direct tax front, especially on personal income taxes, are ahead of our expectations."
RUPA REGE NITSURE, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI:
"The real concern emerging from the budget is that it has not given confidence as to how the government will go about the fiscal consolidation process, after hiking the fiscal deficit target.
"While the thrust on agriculture, infrastructure, etcetera augurs well from a long-term growth perspective, the fiscal profligacy is quite obvious in the near term and hence the markets have also reacted negatively."
SHUBHADA RAO, CHIEF ECONOMIST, YES BANK (YESBANK.NS : 136 -6.8), MUMBAI:
"The budget is clearly focused on maintaining the growth drivers, that is, the rural economy and infrastructure, which is a strong positive for retail segments. Overall concerns do remain on higher expenditure as that would translate into higher fiscal deficit."
HARISH GALIPELLI, HEAD OF RESEARCH, KARVY COMTRADE, HYDERABAD:
"By pushing banks to lend aggressively to farmers, we can expect an increase in the productivity of agricultural produce. With incentives for exporters, export-oriented commodities like cotton and spices may rule firm."
KRISHNA BIR CHAUDHARY, PRESIDENT OF BHARATIYA KRISHK SAMAJ, NEW DELHI:
"The announced higher allocation for the irrigation sector is too little as 60 percent of the country's farm land is still rain fed. We expected more."
* The BSE Sensex (^BSESN : 14103.03 -810.02) tumbled as much as 5 percent as budget unfolds on concerns over how government will fund ballooning deficit.
* The partially convertible rupee falls nearly 1 percent to 48.33/35, versus 47.88 before the budget speech began and compared with Friday's close of 47.89/91. It traded later at 48.30/32.
* Yield on benchmark 10-year bond spikes 16 basis point to 6.99 percent. Most traded 2014 bond rises to 6.48 percent on the government's higher borrowing plan from 6.40 percent.
- India could see growth of around 7 percent this year and more in coming years if it makes sweeping reforms including removal of subsidies and speeds infrastructure development, a government report said last Thursday.
- Bonds have jumped this year to factor in a massive increase in government borrowing. The market had priced in expectations that the deficit will swell to between 6.25 percent and 6.5 percent of GDP.
-Last week India unexpectedly raised gasoline and diesel prices by as much as 10 percent, passing onto consumers some of the recent rise in global oil prices and easing some of the pressures on the budget from subsidies.
- India fiscal deficit widened to 6.2 percent in 2008-09 as the government unleashed stimulus spending to insulate the economy against the global downturn.
- If the government fails to present a plan to bring the deficit back under control in subsequent years, the country's credit rating could come under pressure.
- India's shoddy infrastructure is considered by many foreign investors as the Achilles' heel of the economy that prevents the sort of double-digit growth seen in China
- The current fiscal year of 2009/10 runs until the end of next March.