Ahead of Nirmala Sitharaman's maiden budget presentation at the Lok Sabha today, JPMorgan's Jahangir Aziz said there has been a lot of clamour for fiscal support to aid the economy. "We can't keep blaming goods and services tax (GST) and demonetisation for the economy's slowdown and there is a need to ascertain if the slowdown is temporary and cyclical," he noted.

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Aziz hopes that the government will intervene in the NBFC crisis, however, these steps should be separate from the budget. He added that the government needs to improve tax administration since pushing for taxes in a short period is not a good idea.

Finally, Aziz said that global trade and exports are the biggest drivers of Indian growth. The fiscal deficit can be improved by increasing the privatisation, he added.

Former SBI Chairman Arundhati Bhattacharya said that the government did a "great job" with the interim budget. Bhattacharya said that some material reforms are expected in the PSU banking sector and a "critical decision" may be taken in the NBFC sector.

JP Morgan EM strategist Adrian Mowat said that the budget is going to be a daunting task for finance minister Nirmala Sitharaman and the government has to strike a tight balance in the budget.

Mowat explained that there is no alternate avenue for investments given lower bond yields. While the sentiment in global markets has witnessed an improvement in the past year, the Indian market is still expensive at the index level, Mowat added. The market may see a sell-on-news phenomenon post budget, Mowat said.

From an investment standpoint, no structural reforms are expected in the budget, said Arvind Sanger managing partner of Geosphere Capital Management.

The market needs liquidity injection, while labour reforms are important for growth in the long run. He added that the transfer of RBI’s excess reserves has taken more time than expected. The market is cautiously optimistic ahead of budget, however, there is no room for miracles.

Nomura's Sonal Varma expects 13-14 percent growth in direct taxes and 15-16 percent growth in GST. Varma noted that the 7 percent GDP growth target is optimistic and we are likely to end up with growth at 6.5 to 6.8 percent, and nominal GDP growth is expected to be 10 percent.

Varma highlighted that a higher fiscal deficit number does not necessarily mean stimulus in the economy. Infra bonds, monetising assets, changes in direct taxes could be some reforms that would be a positive signal, she said.

First Published:Jul 5, 2019 10:55 AM IST