Finance Minister Pranab Mukherjee on Monday presented to the Parliament the Union Budget for the coming financial year beginning in April.

Following are the instant reactions by some prominent experts on the Budget:

RAMYA SURYANARAYANAN, ECONOMIST AT DBS BANK IN SINGAPORE:

"The budget is based on optimistic assumptions pencilled in. With substantial expenditure hikes and no increase in excise duty, the question is can the fiscal deficit target be reached?

"Of course the positive move is direct cash subsidy but it has to be seen how and when it will be implemented."


DARIUSZ KOWALCZYK, SENIOR ECONOMIST AND STRATEGIST AT CREDIT AGRICOLE CIB IN HONG KONG:

"Indian FY12 budget assumes GDP growth of 9 percent year-on-year and deficit of 4.6 percent of GDP. It also assumes decline in inflation and further RBI steps to stem it. We see the growth target as somewhat too ambitious given fiscal tightening plans and the need to raise real interest rates.

"The rupee reacted positively after cap on foreign investments in infrastructure bonds was raised to $40 billion from $20 billion. However, impact should be limited as current limit is not fully utilized and there are strict conditions -- the bonds have to be infrastructure ones with maturities of 5 year or more."


AJAY MAHAJAN, MANAGING DIRECTOR AND HEAD OF FINANCIAL MARKETS AND INSTITUTIONAL BANKING AT UBS, MUMBAI: 

"Since the bond market was prepared for worse, this number will be cheered by the market in the short term. In the longer term though, inflation can not be wished away and the market will like to see how the reforms announced today will eventually be implemented.

"The 2022 bond yield may fall closer to 8 percent. Short term bullish as positions need to adjust to the lower fiscal deficit for FY12."


RUPA REGE NITSURE, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI:

"The borrowing number is on the lower side. Currently the country is facing so many uncertainties and the realisation of these targets (fiscal deficit and borrowing) will depend upon the government's total receipts, both tax and non-tax.

"Going by the current macro-economic situation, it looks difficult that the borrowing programme will be contained at this level.

"Even this year, the fiscal deficit at 5.1 percent was largely because of the one-off revenues from the telecom spectrum sale. Hence, considering the slight growth moderation expected next year and the heightened inflation, 4.6 percent looks difficult to achieve.

"Both the borrowing and fiscal deficit numbers numbers have been worked out taking into account the most optimistic macro-economic scenarios, which in all likelihood is not going to be the real situation."


R.V.S. SRIDHAR, PRESIDENT AND HEAD OF MARKETS, TREASURY, AXIS BANK, MUMBAI:

"Market should take it easy now as the borrowing number is lower than what market had estimated. But we have to go through the fine print of the document to see how the liquidity pans out. But for now, I expect the 8.13 (percent) 2022 bond to move closer to 8 percent and face resistance at those levels."


PRADEEP MADHAV, MANAGING DIRECTOR, STCI PRIMARY DEALER, MUMBAI:

"Net borrowing of 3.43 trillion rupees, is very much manageable and should not add to pressure on interest rates.

"Now we need to watch what the government does about the 10,000 crore (100 billion rupees) of borrowing needed to make up for the auction cuts in the current financial year."