A correspondent in Mumbai reports: The Sensex boom has not surprised many. After the coronation of Narendra Modi as the prime minister, stock brokers, investors and financers have been upbeat.

In Mumbai, however, rumours about Modi and his government are driving some speculators crazy.   Here are two rumours doing the rounds in Mumbai stock-broking circles that have no concrete basis.  

One rumour is that it is possible that Modi will go for a radical step and free the rupee and make it floating -- meaning it will be driven by market forces. In doing so the Indian economy may face some pangs for first two years but it is very likely, speculators argue, that after two shaky years in the international market, decontrolling of the Indian rupee will help increase foreign exchange reserves.  

Before the next election comes in 2019, India's foreign exchanges could be $1,000 billion, the speculators believe.   However there is no basis to the speculation.  

But the second rumour in the Mumbai markets is even more bizarre. People view Modi as a radical reformer. They think he is so strong leader that he can take any decision and go to any extent to revive the confidence of people in the Indian economy. It is debated that Modi may abolish income tax and end sleazy deals made between assesses and tax officials and try to end the tremendous corruption in the revenue department.  

The speculators say instead there could be tax on each and every banking transaction and that would help serve government coffers better. It's said that people may be asked to just impose a 2% levy on all bank transactions.  

We reiterate there is no basis at all for this speculation. But the huge expectations from the upcoming Budget is driving speculators crazy.