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Below the Interim Budget: On Expected Lines by Dr. Manoranjan Sharma, Chief Economist at Infomerics Ratings

With no changes in direct and indirect taxes, including import duties, 70 bps reduced fiscal deficit, 11.1% rise in capex, thrust on poor, women, youth & farmers, the basic philosophy of the Vote on Account, as expected by us, is “if it ain’t broke, don’t fix it!”.

A steep fiscal deficit reduction was clearly anticipated by us. The FM’s welcome fiscal deficit number seems to be realistic because of buoyant tax revenues. The renewed thrust on capex with its significant multiplier macroeconomic effects augurs well for the Indian economy.

A steady growth rate would favorably impact the stock market because “a rising tide lifts all boats”. The focus on people-centric development is manifested in the accent on physical, digital, and social infrastructure, extension of healthcare cover under Ayushman Bharat, strengthened financial sector, DBT, street vendors, Skill India Mission, a housing scheme for deserving middle class to buy or build their own houses and increased milk and dairy production. Welcome measures relating to Mudra Yojana, Financial assistance to farmers, crop insurance, e-NAM, women entrepreneurs, higher female enrolment in higher education, SHGS, and sustainable development would resonate across the development spectrum and, therefore, also help at the hustings.

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