Indian stocks surged to a record high Wednesday on hopes that the newly elected government will announce reforms to revive the economy in its first budget next week.
"This is primarily a budget expectation rally. People are hoping to see some real policy reforms in infrastructure, power and taxation," said
But the Sensex has soared nearly 22 percent this year, making it one of the best performers in the region, largely thanks to the rise of Prime Minister
Modi's government has already partially raised railway fares, automobile fuel costs and cooking gas prices to try to reduce the country's deficit.
But a further uptick in stocks may now depend on how the government tackles soaring food inflation spurred by a shortfall in annual rains, analysts say.
"If you indulge in mindless populism you burden the exchequer... you convert yourself into a high taxation society. It does not work," he said Tuesday, according to the
Jaitley, who will present the budget on Thursday, added that "bold decision-making is now possible".
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