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Finance minister Nirmala Sitharaman will present her maiden budget on Friday at a crucial juncture in the economy when growth is slowing down and so are revenue collections. Consumer demand which has so far been the only engine driving the economy now looks vulnerable. Here are the five things to watch out for in the Budget 2019-20:

Nominal GDP assumption

The 11.5% nominal GDP growth for 2019-20 assumed in the interim Budget is unlikely to be achieved since the Economic Survey has now pegged real GDP growth at 7% for the same year and retail inflation is firmly anchored below 4%. A lower nominal GDP growth may make it difficult to achieve the fiscal deficit target of 3.4% of GDP in 2019-20 while a high nominal GDP print will be looked at with suspect by analysts.

Supporting rural economy, resolving water crisis

While the government has announced the PM-KISAN scheme to support farmer’s income, it may announce more measures to revive rural demand. Similarly, the drought scenario in a large part of the country may force the government to formulate concrete measures for water conservation under the new water ministry.

Balancing the fiscal math

With growth slowing down, the government is unlikely to meet its revenue collection targets assumed in the interim Budget. As per the provisional estimates of Controller General of Accounts, the total receipts of the government in 2018-19 witnessed a shortfall of ₹1.46 trillion, compared with the revised estimates of ₹14.8 trillion for the same fiscal year. This was mainly on account of lower tax revenue collections. Greater reliance on off-balance sheet borrowing and lower subsidy allocations will raise question marks on the credibility of the fiscal math.

Measures to boost growth

While digression from the fiscal consolidation path is unlikely, policy measures and incentives that the government may announce to boost the economy which is at a five year low of 6.8% in 2018-19 will be keenly watched. Finance minister Nirmala Sitharaman in Rajya Sabha on Tuesday promised that the government will take immediate steps to arrest the slowdown in economic growth and encourage manufacturing.

Inheritance tax

Though hard to administer and a move that may risk alienating the rich, an inheritance or estate tax that does not pinch the well-off will not only help raise resources for the revenue starved government, but also improve the optics of the Narendra Modi administration’s pro-poor credentials in its second term.