However the finance minister's approach could be described as one which goes three steps ahead and two steps backwards.

`Intellectual leadership' was the missing link in the budget. The budget has luckily come at a time when the market is already in the bull phase hence we have witnessed the sharp upside swings on Saturday. It goes without saying that the Government has provided enough impetus to the sunrise industry, which has also reflected in the indices. The Government's decision to impose corporate surcharge of 10 per cent is perceived as an additional pinch but not a harsh one hence should be absorbed well by the market.

The most interestingaspect of the capital market reform was the measures announced in respect of corporate mergers and amalgamations. This measure would specifically provide a fresh lease of life to the dud and small cap beaten down stocks which would now be identified as takeover targets. These stocks will now trade at fresh valuations. The FM's message will provide a kickstart to the takeover mechanism.

The benefits on taxation and depreciation front provided in the budget are the much needed trigger point for this new scheme of arrangement in the markets. The finance minister's announcement on the disinvestment targets lacks clarity. This is a source of major disappointment. The actual disinvestment plans were not spelled out in the budget. The minister should have announced the time bound programmes and the names of the companies in which the Government would divest its stake. Moreover the fiscal deficit level is extremely high and not an acceptable macro economic factor.

The budgetary sops provided to the mutual fundindustry especially UTI is remarkable. As more and more investors realise that investing in open-ended schemes of mutual funds would help them not only get an exposure to debt instruments but also earn a tax free income, the inflow of funds into such mutual funds will increase. This would have a positive impact on the markets as our mutul funds will be cash rich.