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A quick glance at the fiscal arithmetic reveals that there is no severe fiscal austerity proposed in the budget

Budget News: The interim budget has laid the ground for cheaper home loans and lower interest rates in general. The lower fiscal deficit of 5.1% has meant borrowing is almost Rs 1 lakh crore lower than expected. Also, since more of the government spending is going towards capex, it will not be inflationary and would make it easier for RBI to reduce rates in future. By pegging the fiscal deficit at a lower level and pruning central borrowings, the Centre is seen as having put subtle pressure on RBI to boost liquidity and soften interest rates.

Much of the work and legacies of previous Finance Commissions is getting lost because it isn’t a permanent body. Administrative difficulties also abound. A provisional solution is to turn the Finance Commission Division (FCD), as the custodian of FC records and responsible for its award implementation, to be turned into full-fledged department, serving as the permanent secretariat for the Finance Commissions

The fact that the Budget is being presented a couple of months before the general elections makes it an extremely important political exercise | Latest News India

This article is authored by Pooja Gupta and Harshika Tripathi, Policy and Development Advisory Group.