India / Rates

India Budget: prudent counter-cyclical bent

Radhika Rao / February 01, 2020
The FY21 Union Budget carried a counter-cyclical bent, with the FY20 (revised estimate) deficit pegged at -3.8% of GDP and FY21 at -3.5%.
Key summary points
  • Fiscal deficit targets for FY20 and FY21 were raised to -3.8% of GDP and -3.5%
  • Measures carried a pro-consumption bias, investment focus and…
  • … Moves to attract foreign funds
  • Burden of revenue generation shifts to non-tax proceeds, particularly divestments
  • We retain our call for policy rates to be kept on hold this year

India Budget: prudent counter-cyclical bent

Photo credit: AFP Photo

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