Finance Minister, Arun Jaitley began unveiling its 2018/19 federal budget aiming for stronger economic growth to win over voters ahead of a national election next year while trying to maintain fiscal restraint.
To the thumping of desks from partymen, Finance Minister Arun Jaitley rose in the Lok Sabha to deliver what is likely to be the last full year budget ahead of an election that must be held by May 2019.
While growth has been slowed by the botched rollout of a nationwide goods and service tax (GST) in 2017, and a shock move to ban high value currency notes in late 2016, investors have so far looked beyond the setbacks, perceiving the initiatives as positive long term.
To keep investors on side however, Jaitley will have to convince them that he plans to keep to his word on working towards reining in the fiscal deficit, one of Asia’s largest.
A Reuters poll this week showed most economists expect a 3.2 percent deficit in 2018-19, as the government looks to increase investments in areas such as agriculture. Anything much beyond that, however, may draw a swift sell-off in the markets.