Given the higher inflation trajectory, any pump priming through a larger fiscal deficit would add to the inflation. Pressures of last full Budget: There are expectations from the last full budget of any government to be a popular one. This augurs well for the economy as it would provide higher tax revenues without the government having to resort to higher tax rates. The government can take comfort of higher revenue mobilisation possibilities in the next fiscal with this increasing base and continued greater formalisation of the economy. We expect a balance between populism and prudence but there is possibly not much headroom for a great cut in the fiscal deficit.

Source: dna February 01, 2018 00:17 UTC