To decide which of the two options deserves more importance will be difficult for the finance minister, given the present political sentiment. If the goal is industrial and economic growth, he will need to provide a fillip to the infrastructure sector. "Poor infrastructure is the major impediment to industrial growth," experts say. Growth of this sector suffers primarily on two counts. Firstly, despite privatisation, the sector has been in the domain of the Centre and states. Secondly, government funds cannot cope with the actual requirement.

The single most concern of any investor is to get returns on investment. This is uncertain in the present set up given the poor financialhealth of state electricity boards (SEBs). More sops will have to be announced to lure investors. The government, in the power sector, has already granted a number of incentives such as tax holidays, low import duties and a 16 per cent assured return on equity. However, considering the huge investment and high risk additional benefits are needed, sources say.

"The industry is expecting reliefs in taxes, customs duty and countervailing duties. Additional tax benefits should be announced to attract investments from various local funds in the sector," they added. The investment benefit under Section 10 (23) G should be extended to areas which support infrastructure development.

Financing power projects has become more crucial in the present circumstances, said financial institution (FI) sources. Although the recently imposed economic sanctions do not have any serious implications on the sector or on business prospects of foreign companies in India, they have dampened the sentiment of "investors sitting onthe fence," sources said.

Former finance minister P Chidambaram had announced setting up of the Infrastructure Development Finance Corporation (IDFC) with government funding. While investors discussed the prospects of IDFC sharing the burden of part guarantee on payments, they now want the budget to address the more crucial issue of increasing its financial capacity and scope.