As the Budget 2012-13 gets the final touches, thinking in the government appears inclined towards fiscal prudence and bold growth-driving measures.
Steps to attract greater foreign investment, generate additional revenue from indirect taxes, introduce subsidy-targeting mechanisms and draw a prudent fiscal management blueprint in line with the Fiscal Responsibility and Budget Management (FRBM) road map are likely. Individual taxpayers may be given certain benefits to sweeten the exercise.
Finance Minister Pranab Mukherjee will likely encapsulate this thinking in his Budget speech, to be finalised by March 13.
"It will not be a please-all Budget. It will aim at setting the economic fundamentals right," said an official in the know of the developments.
He said all-round policy measures to attract foreign investment, tight fiscal management, targeting of subsidies and additional revenue measures, including higher excise duty, could be the four pillars of the Budget.
This year's Budget would come at a time when the tough global situation has affected the economy. It is also the first Budget of the 12th Five-Year Plan.
The Budget's final shape would spell out priorities set by Prime Minister Manmohan Singh, Finance Minister Pranab Mukherjee, Planning Commission Deputy Chairman Montek Singh Ahluwalia and Prime Minister's Economic Advisory Council Chairman C Rangarajan.
The prime minister's investment focus may translate into the arrival of foreign investors in critical sectors such as infrastructure.