Wednesday, February 15 2006 11:00 Hrs (IST) - World Time -

New Delhi: Budget this year is likely to keep hard reforms at bay, focus on checking inflation and announce the road map for Goods and Services Tax as part of major indirect tax reforms that will make legal, medical, rail and hosptiality services more expensive.

A clear directive has gone from Prime Minister Manmohan Singh to Finance Minister P Chidambaram that nothing should be done in the budget that affect the price line as inflation hits the 'Aam Admi' (common man) the most, official sources told sources adding there would not however be populist measures that may threaten fiscal stability at a time when the economy was on a roll.

The Prime Minister's punch line has been 'money does not grow on trees and you can't spend your way to prosperity', the sources said, adding the Government was keen that the budget did not signal any laxity on fiscal front which meant there would be efforts to bring down the fiscal and revenue deficit targets in 2006-07 keeping in line with the commitment made in the Fiscal Responsibility and Budget Management Act.

As a logical step forward with the implementation of the state-level Value Added Tax last year, Chidambaram is widely expected to introduce Goods and Services tax as part of the indirect tax reforms to move towards national Value Added Tax, the sources said.