The challenge for any finance minister in presenting a Union Budget is to balance multiple and sometimes conflicting objectives of growth stimulus, subsidies for the deprived sections, and yet balancing the books. This tightrope walk is difficult at most times, but against the backdrop of global turmoil, it becomes even more difficult. President Trump has slapped import duties against the Canadians and the Chinese.

The Chinese will try and dump their goods into countries like India. Trump’s policies are creating global nervousness, and hence there is a flight of capital toward the safety of New York’s bond markets. That creates a strong demand for the dollar, making it stronger. India, too, is facing a situation with the falling rupee and net foreign direct investment falling to zero.

Against this backdrop, the FM presented her eighth budget in a row, proposing to spend about Rs 51 trillion and expecting revenues of Rs 35 trillion. The gap is the deficit to be made up by borrowings. Even as the major highlight is the big cut in personal income tax, the budget does not lose sight of the need for fiscal prudence. As promised a few years ago, the fiscal deficit next year is aimed to go below 4.5 percent of the GDP.

This is a major milestone in India's fiscal consolidation journey, achieved despite maintaining an average of 7% GDP growth and having increased capital expenditure for the past few years. The next year’s target of 4.4 percent fiscal deficit ratio is sought to be........

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