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UPA Version 2 will undergo what is seen as its first market-friendliness test on Monday morning when Union Finance Minister Pranab Mukherjee takes the floor in the Lok Sabha to present the budget.

The hope is that UPA 2 will be free of, what the Street termed, the red bugs that crashed the first version whenever it switched to the reform mode.

Expectations soared high ever since the new government swung the numbers when the Lok
Sabha election results came in last May. Last week’s economic survey only whetted the appetite of investors and the Sensex is still shy of the 15000 mark breached soon after the polls.

Meanwhile everyone is chipping in with wish lists. As late as the weekend, corporate honchos were wooing the media to get their points in during the finishing touches to the budget
proposals.

If talking heads on television are to be believed, India is on the threshold of market reforms never seen since the economy first opened in 1991. Few are even prepared to consider the political compulsions of a government that barely commands absolute majority in parliament, forget the two- changes in the constitution.

The first signals of where the government’s sympathies lie came out on Friday’ when Railway Minister Mamta Banerjee chose people over profit, as she put it.

The government may have raised fuel prices to partially compensate the public sector oil companies for the losses suffered by them, but it falls short of the complete price deregulation expected by the market.

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