Budget 2014: Govt should focus on fiscal consolidation, tackling inflation, say experts

Foreign money coming in and stock markets doing well are the only silver linings in the current environment, according to Ranade.

"In terms of priorities, the government should take anti-inflationary stance and keep in mind fiscal consolidation. Both agriculture and manufacturing sectors are facing issues. In agriculture, supply is not keeping pace with demand. We have to tackle overuse of fertilizers," he said.

Echoing Ranade's view, Virmani said the objectives of the government are quite clear. "Their first priority is to restore sustainable fiscal position."

EY's Poddar said that the government should avoid controversial structural reforms that are going to dampen the enthusiasm which is already reflected in the markets. "Much of the decline in the growth of the Indian economy is because of the government and not global market forces. It is because of policy paralysis and policy which has contributed to the negative sentiment among investors."

Poddar adds that he expect the budget to provide a clear guideline on policy framework. "Government can itself stimulate capital expenditure by investing in railways. I think the government can boost growth rate to 6-6.2 per cent. The increase in the capex can come from increase in direct federal capital spending, increase in spending by the public sector units, increase in spending by state governments, and increase in private spending through  appropriate monetary policy and incentive regime," says Poddar adding that "investors are anticipating a clear roadmap for GST (goods and services tax). Also, we expect reversal of tax policy, especially retrospective tax. If the policy is detrimental, they should reverse it."

Mathur of PwC said that it is time to start thinking about the various long term measures. "In terms of long-term measures, there's a need to review the policies that impact manufacturing decisions and manufacturing operations. Other major exercise that the government must undertake is to align tax policies with sector regulations," he said.

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