"The government's balance sheet gives it no flexibility," said Jagannadham Thunuguntla, chief strategist at SMC Capitals Ltd in New Delhi. "It has to roll back some of the stimulus to control the fiscal deficit. Chances of a positive surprise are few in the budget."

1. Stocks fall on fears that spending may be curbed
Bloomberg, February 26, 2010
Mumbai: Most stocks on India's benchmark index fell on speculation the government may raise
excise taxes and curb spending in the budget on Friday.
Tata Motors Ltd, the nation's biggest truckmaker and owner of Jaguar Land Rover Ltd, slid to a
three-month low. Hindustan Unilever Ltd, the biggest household products maker, lost 2.9 per
cent.
Finance Minister Pranab Mukherjee will promise to cut the 16-year-high budget deficit in his
budget speech today, according to the National Council of Applied Economic Research in New
Delhi and Morgan Stanley economist Chetan Ahya.
"The government's balance sheet gives it no flexibility," said Jagannadham Thunuguntla,
chief strategist at SMC Capitals Ltd in New Delhi. "It has to roll back some of the stimulus to
control the fiscal deficit. Chances of a positive surprise are few in the budget."
The Bombay Stock Exchange's Sensitive Index, or Sensex, fell less than 0.1 per cent to 16,254.2.
Sixteen companies on the 30-member index fell, while 14 rose. The S&P CNX Nifty Index on
the National Stock Exchange gained less than 0.1 per cent to 4,859.75. The BSE 200 Index lost
0.1 per cent to 2,044.06.
Tata Motors declined 2.5 per cent to Rs667.4. Hindustan Unilever dropped 2.9 per cent to
Rs235.2.
Mukherjee may promise to cut the budget deficit to 5.5 per cent of gross domestic product from
6.8 per cent, according to the National Council of Applied Economic Research and Ahya. The
challenge for Mukherjee is to unwind Rs7.5 trillion (Dh594.8 billion) of fiscal stimulus and curb
consumer-price inflation that's the highest in the Asia-Pacific region, according to data compiled
by Bloomberg.
The government may today report GDP growth slowed to 6.9 per cent last quarter from a year
ago, compared with a 7.9 per cent rate the previous three months, the median of 19 forecasts in a
Bloomberg News survey shows.
Larsen & Toubro Ltd, India's largest engineering company, gained 2.3 per cent to Rs1,535.6
after it said its units plan to borrow at least Rs100 billion this year to fund road-building and
power projects.