New Delhi: Economic reforms, which have been stuck for years, could catch pace this Budget as Union Finance Minister Pranab Mukherjee is expected to make important announcements regarding the process.

In her opening address to the joint sitting of Parliament on Monday, President Pratibha Patil said that economic reforms were needed in many sectors. The government has given clear indications about such an impending announcement for the infrastructure sector.

But it could take steps to withdraw the economic stimulus package that the government extended to the industry. The Prime Minister’s Economic Advisory Council (PMEAC) has also advised that the stimulus package should be withdrawn completely.

Presenting his review report on Monday, PMEAC chief Dr C Rangarajan said there was no need to continue with the stimulus which was designed to offset the impact of global economic slump. This will also help government reduce debt and inflation.

If the Finance Minister accepts PMEAC’s recommendations, there could be a 2 per cent spurt in manufacturing tax on various products.

Apart from reining in inflation, government will also prioritize increasing domestic and foreign investments. The government could, therefore, put emphasis on increasing FDI inflows.

It is being speculated that the government could announce investment of up to Rs 40 lakh crore in the infrastructure sector. It could also take measures to attract this investment from various quarters.

A week before the Union Budget, government also indicated that it could make announcements in order to increase investment in the power sector. Both the President and PMEAC have called for this step.

The government could also take steps for subsidy control.