IF the governments mandate in last years Union Budget was to announce measures that pave the way for the economic revival, it faces a more daunting task this year. As the economy limps back to growth, thanks to fiscal stimulus measures, the government is under pressure to ensure that the recent recovery doesnt falter and also to keep inflationary pressures in control.

The Sensex has almost doubled from its lows in March last year, factoring in economic growth projections of even 8-9% over the next couple of years. A section of the market thinks the stimulus should stay for some more time for the economic growth to rebound to their estimates. But the government is reluctant to oblige investors or the industry on this matter on concerns that it could result in overheating of certain pockets of the economy and further deterioration of its finances. In the

Budget, market participants expect the government to give clarity on how it plans to deal with the situation, without upsetting economic growth. ET spoke to five leading market participants to get a sense of what can investors expect from the Budget. Excerpts:

Rashesh Shah, chairman, Edelweiss:-

The overall fiscal situation will improve, driven by better revenue collection. FY11 can be the starting point of a consolidation in the next 3-4 years.

However, industry, especially sectors like auto and steel, will keep fingers crossed on the pace and extent of a potential stimulus rollback, mostly hike in excise duties.

The market will look for more clarity on disinvestments and clearer road maps on GST and direct tax codes.

Nirmal Jain, CMD, India Infoline:-

We expect Finance Minister Pranab Mukherjee to roll back excise duties, at least half of them, if not fully.

We feel there should be more visibility on the rollout of Goods and Services Tax (GST).

The government is also expected to spell out the specifics about 3G auctions and its disinvestment programme.

There may be a hike in excise duties on cigarettes and alcohol in the 2010-11 Budget.

We also expect the government to keep income tax rates unchanged.

Nilesh Shah, Dy MD & CIO, ICICI Pru:-

We hope that the Union Budget will place greater emphasis on containing the fiscal deficit, as further neglect will push it up to alarming levels.

The government needs to bring off-Budget items like oil and fertiliser bonds into the Budget.

On the tax front, the government should make equitable distribution of tax burden, especially on non-salaried taxpayers.

We hope the Budget has enough measures to boost capital expenditure to revive an investment-led growth in the economy.

Sukumar Rajah, MD & CIO-Asian Equities, Franklin Templeton:-

The Union Budget will provide an insight into the governments assessment of the revival and the ways it would look to manage it.

Some of the subjects need utmost attention.

These subjects are road map for fiscal consolidation, articulation of the fiscal exit strategy, progress on tax reforms and their implementation, supply-side constraints and subsidy burden.

The government should also focus on taking forth the pending physical and social infrastructure agenda.

It should also have clearly articulated infrastructure development and financing policy.

Motilal Oswal, CMD, Motilal Oswal Financial Services:-

The government should reduce securities transaction tax (STT) by at least half in the upcoming Budget.

The exiting STT rates have almost driven away arbitrageurs and have affected the liquidity in the market.

There is a need to keep corporate taxes stable to ensure that the revival is not killed mid-way.

The government should scrap dividend distribution tax (DDT) levied on companies.

There also needs to be a clear-cut definition for long-term capital gains versus business income emanating from stock market transactions.