Sonthalia believes that some rationalisation in duties (excise and import) could happen. Levies on inputs could also be rationalised to bring it in line with end products.

There is a possibility of some sectors seeing the excise duties getting restated to levels prior to those existing before the stimulus packages were announced.

In simpler words, no major increase in taxes is expected. The government, however, is seen augmenting resources from the auction of 3G licenses (over Rs 30,000 crore) and selective divestment in public sector undertakings. These steps would help lower the fiscal burden, and encourage low real interest rates.

Broader expectations

Among key announcements, the market is hoping for a clear roadmap towards implementing goods and services tax by March 2010, which will eliminate the multiple taxes existing currently.

Experts are hoping that the fringe benefit tax, which contributes only 2 per cent to government's revenues, will be abolished as it involves huge administrative burden.