On the steps to boost investments in the infrastructure sectorThe market expects the government to announce a series of measures to protect industries hit by recession/low international prices. Steel is the sector which is sure to get concessions as the government's exposure to this industry is very high. It is for this reason that most of the steel scrips have been rising on the bourses. Contrary to popular perception that there will be a fewconcessions for the cement sector, I think it is highly unlikely. This is because for three reasons -- first, the sector has not been hit by cheap imports like in the case of steel; second, the industry's performance has already shown an improvement; third, the government's exposure to the sector is not too large.

On petrochemical and petroleum sectors

The budget is likely to give sops to the petrochemical sector which has been the worst hit by cheap imports from China and south-east Asian countries. This should lead to some interest in counters like Relaince and IPCL. So far as the petroleum sector is concerned, I expect the government to levy an excise on the finished good rather then on crude oil. This will be a step closer to the government's stated objective of dismantling the administered price mechanism.

On the other fiscal measures

The Finance Minister cannot do much on this front. Considering his party's weak position he is unlikely to touch direct taxes. In indirect taxes, hemay try to plug the lopholes and rationalize some of the duties. I think he night related the excise duty to the selling prices in certain cases. To increase revenue, he also might try and expand the service tax net. But a service tax on software companies' export earnings is unlikely. What he can do is to tax their domestic earnings. Sinha is also unlikely to announce any package for the capital markets. However, if he carries out some of the much needed fiscal corrections, irrespective of the hard choices, the impact on the capital market will be good in the long-run.

On software boom

At a time when most of sectors are showing a negative growth, the software sector has been growing at a rate 60-70 per cent. So, the dream run in such stocks is justified to that extent. The upside will continue for some more time. I expect software scrips to peak around April 1999 when these companies announce their fourth-quarter results. After that, investors should reduce their exposure to the sector because Idon't think all companies in the sector will continue to post exceptional results. This is because unlike Microsoft and Intel, which market products (and strong brands), Indian software companies are at lower end of the chain. Indian companies are dependent on prinicipal (baiscally a few clients) for business.

Sectors bullish on

I think sectors like cables (telecom), housing finance and computer hardware companies should fare well in the next fiscal. Cables industry should do well on account of fresh orders from DoT. Housing finance companies have so far not been able to tap the huge potential in housing finance because of problem of securitisation of debt.

A decision on this front should be taken soon. Computer hardware should do well as the demand is likely to pick-up from households thanks to the internet fever. Even colour TV manufacturers might see a good year.