The recently announced fiscal package by union government would have positive impact on Indian economy. Analysts feel that it would help to increase local demand and increase spending. The fiscal package and Reserve Bank of India's (RBI) interest rate cuts would mitigate the impact of global slowdown on Indian economy in a long run. Market would enjoy the relaxations in terms of duty cut and additional spending in infrastructure sector.
 
Automobile sector would register growth due to revision of the Central Value Added Tax (Cenvat) rate and shares of auto companies may show marginal increase. Overall, Auto sector is happy over two counts namely duty cut and fuel price reduction. Both these steps go in favor of auto sector and it would not be surprise if prices of two-wheelers and four wheelers decline in coming days. However, shares of infrastructure sector may decline due to small relief in fiscal package.
 
Morgan Stanley, while commenting on government's move, said, "India needs pump-priming (government's measures to stimulate economy) without the use of public debt, more liquidity on the balance sheet of banks, better relative valuations, earnings downgrades, global calm leading to a better balance of payment (BoP), a good election result to ensure smooth policy action in the coming years and quick corporate restructuring focused on delevering operations to limit the earnings damage."