There are many collateral advantages of taking the tough decision.
Sensex gained nearly 0.4% or 96 points at 26087 level while Nifty ended up by 42 points or 0.5% at 7,791.40 level.
Inflation is down and there's every chance that crude prices will be subdued through the next year.
Sensex eneded 374 points higher on rate cut expectation from the RBI.
However, the budget arithmetic is slightly optimistic.
Economists expect Modi to announce big-bang reforms.
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India's share of 2015 emerging market allocations will be driven by FII perceptions on likely growth and reform.
'Modi took to the dais and said he would like to step down as chief minister over the riots.' 'Immediately, people from several sides got up and said there was no need to do so.' 'Whether it was orchestrated or not, Shourie wasn't sure.' 'But, according to him, Vajpayee felt that it was a coup.'
The Centre had set up a Commission under former Reserve Bank of India Governor Bimal Jalan to suggest steps to rationalise subsidy and help the government in effectively bringing down the fiscal deficit.
The government package for public sector banks, announced last Friday, has been welcomed by the stock market with the PSU banking index booking smart gains.
Private sector firms need to be re-engaged for better infra planning.
Even as the September quarter performance was subdued, analysts expect the second half to be better on higher prices, output.
'When he first came to office, my belief is that the PM's reading of the landscape was that, with a vanquished Congress and fragmented Opposition, he was looking at least at two terms in office. This reading perhaps allows for a more cautious, gradual approach.' 'It was only a matter of time before the government was forced to come face-to-face with a serious corruption scandal. This is not a commentary on the BJP, but a statement about India's political economy.' 'There is growing concern about the government's commitment to freedom of expression, religious tolerance, and an independent civil society. Thus far, the positive movement on strategic and economic matters has crowded out these concerns, but they are lingering beneath the surface.'
Enhanced revenue generation is a priority for the government.
The finance ministry and RBI must get less conservative and improve co-ordination.
Economic reforms seem to be on a slow train, while good old fiscal populism is alive and flourishing.
Workers' attitude is changing and they want to work more and demand more wages. They want more productivity.
The way the present government has dealt with appointments of civil servants remains to be a cause for concern.
In an hour-long chat on rediff.com on Friday, A K Prabhakar, senior VP and Head -- Equity Research (Retail), Anand Rathi Financial Services Ltd, discussed the best stocks to put the investors' money in.
India will have to devise policies to ensure overall growth in FY16.
The 30-share Sensex closed up 34 points at 27,831 and the 50-share Nifty ended up 15 points at 8,356.
Once these banks start showing losses, they will not be able to pay dividends to the government nor pay taxes, which will further aggravate the situation for the government as its return on investment as an investor would be very negligible for the next few years, says M V Subramanian.
A government that confuses PowerPoints for policy is delaying structural change too much.
