Bombay Stock Exchange president JC Parekh says that the exchange is all geared up for a "swadeshi" budget. According to him, there is a strong feeling among members that the finance minister will make efforts to make domestic financial institutions more aggressive towards investment in the secondary markets.

Apart from this, Parekh feels that the market expects certain tax concessions, permission to insurance companies to invest 10 per cent of their corpus in secondary markets through UTI and total freedom to UTI, enabling it to make its owninvestment decisions rather than be driven by the government's whims and fancies.

Allowing buy back of shares is another area which has generated a lot of debate and led to swings in the Sensex. Parekh, however, feels that the government must ensure that only good corporate entities with a strong reserve base be allowed to buy back their own shares.

Apart from this, there are certain macro issues as well. According to Jardine Fleming's chief investment officer, UR Bhat, the government should address the huge lack of demand in the economy. The government will need to raise enough money, and for that it will aggressively try to privatise further. Thus, a renewed thrust on disinvestment as well as opening up of the insurance sector to combat the impact of the US sanctions is expected.

There is a demand to bring FIIs on par with mutual funds in terms of the capital gains tax structure.

Sun F&C chief executive officer Nikhil Khatau expects a pragmatic budget rather than a popular one. There will be no sopsand, instead, the budget will see many subsidies removed and money diverted towards the growth of the economy.

"Pension funds may be allowed to invest in equities through mutual funds," said Khatau.

There are others who feel that policies through the year and not just in the budget are going to decide the future of the economy and the markets.

"There have to be decisions to be taken across the year and therefore I do not pin too much of expectations on the budget alone," said DSP Merrill Lynch vice-chairman Shitin Desai.

Credit Suisse First Boston managing director KR Bharat feels that thrust would have to be on opening up the infrastructure, insurance and real estate-related sectors. "The privatisation route is the only way the government can raise revenues in the form of direct foreign investments. The need of the day is to reduce fiscal deficit. The government also needs to increase developmental expenditure to boost the economy," he said.

The National Stock Exchange (NSE) has already urged thefinance minister (for the second year running) to do away with taxing the profits of a clearing corporation given the crucial role it plays in a modern market. The exchange is hopeful of being lucky this time. On the depository front, there is little that the budget can address, except of course, doing away with stamp duty on demat bonds and debentures. This could only be done in case of PSU bonds as the rest are a state subject and thus cannot be addressed in the budget.

"The finance minister can however, do some kind of a swap with the states and introduce this measure which will give a boost to the debt market," feels a top stock exchange official.