Foreign investors are looking for fiscal prudence but it is unlikely as there could be more subsidies for the farm sector and expected tax rate cut, said Hugh Young, MD, Aberdeen Asset Management Asia.
The budget will be a political one as the government is preparing for elections and trying to regain the prominence of the BJP and that is not necessarily what a fiscal prudence policy should be,
"However, it is a reality in the world and is happening in every country, populism is widespread,” said Young.
Mohammed Apabhai, head-APAC Trading Strategies, Citi Group, also said the budget that is focused on fiscal prudence would be what foreign investors are looking for.
“We are in an environment of tightening global liquidity so the India bond markets will be looking for funding or competing for funding in competition with a lot of the other markets as well. So any improvement on the numbers would be welcome. I am not sure we are going to be getting that in the same way,” he said.