Budget Back
Union Budget 2018 -19: Shades of populism ahead of election year

  • 1 February 2018 3 Union Budget FY18-19 Shades of populism ahead of election year Yet, no evidence of profligacy
  • It was a relief to note that the government did not succumb to demands for free cash incentives, farm loan waivers or universal basic income. Further, it remains to be seen if the announcement to keep minimum support price (MSP) for all unannounced kharif crops at least at 1.5x of their production cost will lead to a significant growth in MSPs and/or thus higher inflation in 2018-19.
  • Moreover, the headline fiscal deficit target of 3.3% of GDP for FY19 is broadly in line with the consensus, while market borrowing targets are better-than-consensus.Details, however, are not as favorable.