After kicking off the Budget exercise early this week, Finance Minister P Chidambaram on Thursday had a brain-storming session with Planning Commission Deputy Chairman Montek Singh Ahluwalia on the state of the economy.

"We had discussions on the state of the economy in detail. It was a routine meeting," Ahluwalia told reporters after an hour-long meeting with the finance minister.

Budget 2005-06: Tax reforms top priority

Ahluwalia, who played a pivotal role in Budget making as finance and economic affairs swecretary under three finance ministers -- Manmohan Singh, Chidambaram and Yashwant Sinha -- is an expert on policy issues, particularly economic reforms.

Both Prime Minister Manmohan Singh and Chidambaram have already indicated that the next Budget would lay emphasis on comprehensive tax reforms and create necessary environment to boost infrastructure development, which had potential to absorb upto $150 billion worth of foreign direct investment in the next four to five years.

Though Ahluwalia was tight-lipped over today's discussions, it is understood that utilisation of a small portion of burgeoning foreign exchange reserves, now at $120 billion, for infrastructure development figured in the meeting.