Given the backdrop of a modest 5.5 per cent GDP growth expected in FY13 and uncertainties on a global economic recovery, Union Budget 2013-14 assumes immense importance. It is imperative to stimulate domestic demand, that too through infrastructure creation because of its huge multiplier impact in terms of creating new jobs, enhancing productive capacity of economy and promoting inclusive growth. The budget must encourage NBFCs, especially those which are into financing infrastructure assets and projects (namely NBFC-AFCs and NBFC-IFCs respectively) as these are the principal conduit of credit delivery to the multitude of small and medium enterprises (SMEs) which are providing crucial services in the infrastructure sector but remain outside the purview of banks. Such NBFCs should be provided a level playing field vis-à-vis banks in terms of tax-treatment and tax breaks, access to funds and asset recovery. There is a lot of buzz surrounding issuance of new bank license. The lesson from the last round of bank license issuance was that the few success stories, like HDFC Bank, were able to identify what the then existing domestic and foreign banks were not doing well or not doing at all. Accordingly, they rolled out those services, succeeded, created new business segments which eventually became crowded with new players. In today's India, NBFC-AFCs and NBFC-IFCs, which are well capitalized, technologically sound, enjoying a pan-India presence and catering to a segment that can make a significant difference to the economy, are the ideal candidates for new bank license. Although this falls more in the RBI domain, Finance Ministry can surely influence the decision. An announcement to this effect through the budget would be welcomed. Of late, there has been a serious dearth of equity capital for infrastructure projects. To counter this, government has encouraged Venture Capital Companies (VCCs)/Venture Capital Funds (VCFs) so as to enable investment through equity into infrastructure projects. Unfortunately, there has been some inadvertent error whereby in the Finance Bill 2012 when Sec. 115U of the Income Tax Act was changed leading to an anomaly whereby investors in VCC/VCF will have to pay tax on accrual basis and not on the basis of receipt. This needs to be addressed immediately and for that Sec 115U of the IT Act must be restored in the form as was before Finance Bill 2012. Also, the budget must attempt to address bottlenecks in the power and road sectors. Keeping in mind the fiscal position of the government and its limitations to undertake investments on its own, every possible attempt must be made to encourage private investment in infrastructure.