The euphoria over the National Democratic Alliance's first budget is proportional to Prime Minister Narendra Modi's election victory. On the other hand, his spectacular victory is also proportionate to the rejection of the erstwhile United Progressive Alliance government. Between the preceding and the current government, the much talked about issue is that of reviving the economy. Naturally, the first budget is the occasion where the NDA government will make or is expected to make a statement.
There are two distinct expectations, depending on which side one is: first, the growth brigade is positively positioned to expect a budget that fuels economic growth; second, the group that is inclined towards a welfare state is hesitantly hoping that the current government will retain the huge baggage of social spending initiated by the UPA.
However, the deficit monsoon and an empty coffer have the potential to spring a surprise budget. Both the factors contradict each other and the state elections due in the year-end restrict political risks taking.
The deficit monsoon and the forecast of drought in western and north-western states like Maharashtra and Jharkhand (see special feature on El Nino) that go to polls in near future will force the government not to bring in drastic cut in welfare budgets. On the other hand, a fiscal deficit of Rs 2,14,327 crore leaves little room for the government to match and increase the social spending of the UPA government.
Down To Earth pitches a list of probable budget outcomes: