Active Stocks
Thu Mar 28 2024 15:19:25
  1. Tata Steel share price
  2. 155.75 1.90%
  1. ICICI Bank share price
  2. 1,091.10 0.65%
  1. HDFC Bank share price
  2. 1,446.15 0.38%
  1. ITC share price
  2. 429.05 0.25%
  1. Power Grid Corporation Of India share price
  2. 275.85 1.77%
Business News/ Budget 2019 / Budget Expectations/  Market shouldn't expect big surprises in Budget 2019, says HDFC Bank
BackBack

Market shouldn't expect big surprises in Budget 2019, says HDFC Bank

FM Nirmala Sitharaman's first budget will 'broadly be a replication' of the interim budget, economists at HDFC Bank said
  • The 'key issue' in the budget will be the quantum of 'surplus' that the RBI will transfer, economists said
  • Finance Minister Nirmala Sitharaman will present her first budget todayPremium
    Finance Minister Nirmala Sitharaman will present her first budget today

    Mumbai: Investors and the market should not expect any big surprises from the first Budget by the finance minister Nirmala Sitharaman today, economists at largest private sector lender HDFC Bank have said.

    Citing "time constraint", they said finance minister Nirmala Sitharaman's first budget will "broadly be a replication" of the interim budget, with some action on the election promises and some tweaks on the tax and expenditure figures.

    The room for a fiscal stimulus is "constrained" considering that achieving the interim budget's target of 3.4% can in itself be a "tall order", they said in a note penciled Thursday.

    Follow Budget 2019 LIVE updates here

    Stating that fiscal deficit assumptions in the interim budget rested on a higher nominal growth of 11.5%, it warned that if the slowdown and low inflation spill into the first half, nominal growth can be much lower than what is being currently assumed.

    There can be some revisions on the revenue side as the interim budget implied a robust 34% growth in tax collections, but such a buoyancy is not possible even in a good growth year, they said.

    There are bigger constraints on the expenditure side, it said, adding the fiscal commitments to the ongoing schemes are already high and financing for them can be an issue.

    However, the report noted that in FY19, government had cut expenditure by a whopping 1.45 trillion, resorted to off-budget borrowings and transferred its expenditure to central enterprises to meet the fiscal deficit target.

    The "key issue" in the budget will be the quantum of "surplus" that the RBI will transfer, it said, adding the most optimistic of the figures in this is 3 trillion and this can open up space for expansionary fiscal policy.

    However, the economists said their baseline scenario is for a staggered payout of any money "given the clear lack of consensus" in the Bimal Jalan panel that has been formed to decide this amount and the signal of erosion of the RBI's independence.

    Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

    This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

    Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
    More Less
    Published: 05 Jul 2019, 07:25 AM IST
    Next Story footLogo
    Recommended For You
    Switch to the Mint app for fast and personalized news - Get App