Sinha hopes to give a kick-start to the sagging economy with a combination of higher spending -- outlays in most areas have been increased significantly -- as well as protection to local industry. Along with the fall in the value of the rupee, the hike in counter-vailing duties is expected to give local industry a big advantage. Most economists, however, agreed that, given the tough fiscal situation, the government had little option except raise import duties. Former Finance Minister, P Chidambaram, however, chose to describe the budget as inflationary and lacking in any "big new idea".

As expected, defence allocations haveincreased significantly, as have those for atomic energy and space programmes. Sinha, in fact, has assumed that the economy will grow at around 6.5 to 7 per cent -- an assumption that several economists said could prove incorrect. If it does, most of Sinha's assumptions on the tax front will also go awry.

In a shrewd move, Sinha has balanced the swadeshi demand for greater protection by extracting concessions on other fronts. He astounded most critics by announcing that the insurance sector is to be opened up albeit only for Indian companies and the insurance sector regulatory authority is to be given a statutory status. Other measures aimed at wooing foreign investors include liberalising investment rules for FII debt funds.

Investment rules for NRIs have also been liberalised considerably -- individual limits have been hiked to 5 per cent while the aggregate limit for NRIs in a company has been doubled, to ten per cent.

And in order to ensure that foreign investors find it easier to getclearances, Sinha has proposed a "hand-holding scheme". One officer from the administrative ministry concerned, is to be in charge of each proposal and is to ensure that it gets all clearances as early as possible.

The budget's central focus, however, is that of increasing allocations in the infrastructure sector and providing more incentives to boost spending here. Outlays for the infrastructure sectors are up 35 per cent -- that for the power sector has gone up from Rs 6,738 crore to Rs 9,500 crore.

While allocating an additional Rs 500 crore for the National Highways Authority of India, attempts have also been made to increase the funds availability for the power sector. A means is to be found to guarantee the outstandings of the SEBs -- these guarantees can then be pledged with banks to raise fresh funds. Provident funds are also to be allowed to invest upto 10 per cent of their additional funds in securities for infrastructure.

With speculators expecting the Finance Minister to announcewide-ranging concessions such as allowing buy-back of shares and reducing the long-term capital gains tax, the BSE index fell by 150 points in the post-budget session -- it had risen 107 points in the pre-budget trade. Sinha did offer tax sops to host of commodities including packaged tea, branded butter and cheese, ghee and spices and preparations of meat and fish products.

The minister also effected an upward revision in postal tariff on competition post cards, inland letters and parcels to rake in Rs 270 crore in a full year and Rs 180 crore in the current year. There will be no increase in the cost of ordinary post cards.

While reducing customs duty on crude from 27 to 22 per cent, which will result in a loss of Rs 965 crore, Sinha proposed to increase excise duty on motor spirit (petrol) from 20 to 35 per cent to make up the loss. Customs duty on kerosene imported for parallel marketing will be 32 per cent.

After taking into account tax proposals and postal tariff revisions, the total expenditureof the Central government for 1998-99 would be marginally reduced to Rs 2,67,927 crore while net revenue receipts and non debt capital receipts would rise to Rs 1,76,902 crore. The revenue deficit is placed at Rs 48,068 crore which is three per cent of Gross Domestic Product and fiscal deficit at Rs 91,025 crore which is 5.6 per cent of GDP.

Sinha abolished the non-starter service tax on transporters, but the tax was extended to 12 more professions including architects, interior decorators, management consultants, chartered and cost accountants, private security services, real estate agents and consultants, market research and credit rating and underwriting agencies and mechanised slaughter houses.

The marginal personal income tax exemption limit has been raised from Rs 40,000 to rs 50,000 and standard deduction increased to Rs 25,000 from Rs 20,000 for incomes upto Rs one lakh.

While levy of gift tax was abolished, income tax net is being widened to include two more criteria for compulsory filing oftax returns .They are credit card holders and members of expensive clubs.

PAN/GIR numbers have been made mandatory in transactions like purchase and sale of houses, purchase of motor vehicles, transactions of shares above Rs 50,000, fixed deposits in banks above Rs 50,000, application for telephone connection and hotel payments exceeding Rs 25,000.

Sinha also extended mandatory income tax return scheme to 23 more cities taking the total to 35. A major step taken by the finance minister this time was targeted disinvestment of four major public sector units (psus) namely the Videsh Sanchar Nigam Limited (VSNL), Indian Oil Corporation (IOC), Indian Airlines Gas Authority of India Limited and Container Corporation.

With a view to encouraging greater flow of NRI funds, the finance minister proposed to raise the individual investment limit from one to five per cent and aggregate limit for all NRI investments in a company from five to ten per cent. He announced the launching of `Resurgent India Bonds'denominated in foreign currency for subscription by NRIs.