Barclays expects partial stimulus rollback in Budget

Multinational financial services provider Barclays Capital today said it expects the government to pull back some of the stimulus measures in the Budget.

"In the upcoming Budget, we expect the government to pull back some of the fiscal support measures that were provided to domestic industry and export-oriented manufacturers," Barclays Capital said in a report.

It further said the government may go in for divestment in BSNL, PowerGrid, SAIL and MMTC next fiscal that would fetch Rs 25,000 crore and together with higher tax mop-up will  help the Centre reduce fiscal deficit to 3.8 per cent of GDP.

"In the next fiscal, we could see the government selling stakes in BSNL, SAIL, PowerGrid and MMTC, potentially raising Rs 25,000 crore at the current market valuations. We see considerable upside risks to our projection of Rs 25,000 crore of divestment proceeds in 2010-11 fiscal," said Barclays in its report.

Barclays further said there is increased momentum in announcements of equity offerings in public sector units, "which suggests upside risks to our estimate of fiscal divestment proceeds of Rs 25,000 crore in the next fiscal," Barclays added.