Modi pays tributes to Syam Prasad Mookherjee
Prime Minister Narendra Modi, Lok Sabha Speaker Sumitra Mahajan, Union Minister for Finance, Corporate Affairs and Defence, Arun Jaitley, the Union Minister for External Affairs and Overseas Indian Affairs, Sushma Swaraj, Union Minister for Minority Affairs, Najma A Heptulla and others paid floral tributes to Dr Syama Prasad Mookerjee, on the occasion of his birth anniversary, in Central Hall of Parliament in New Delhi on 6 July, 2014.PIB

The Modi government is set to announce its maiden budget in the Parliament today, a day after it promised higher growth of about 5.4 percent to 5.9 percent in this fiscal year. With just a couple of hours left before Finance Minister Arun Jaitley steps up in Parliament to lay down the future course for India's economy, expectations and apprehensions are high.

Here's what to watch out for:

  • Will the Union Budget deliver Modi's much touted 'bitter medicine' or will it bring 'acche din'?
  • Finance Minister Arun Jaitley himself had called for 'fiscal prudence' over 'mindless populism'. Will he play a balance act or will he completely shun populism, something that his government can afford to, given its brute majority in the Lok Sabha.
  • Will the Modi government's policies focus on long-term or short-term goals?
  • Will the budget be business-friendly or citizen-friendly? If the government will borrow from the Gujarat model, which it is likely to, then the Budget is sure to have pro-business policies.
  • While the government is expected to pave the way for investment, everyone will be waiting to see how much FDI it will allow in different sectors.
  • The government is likely to set a higher target for the fiscal deficit over the 4.1 percent of GDP that was set by the former UPA government in its interim budget. It is also expected to announce a stronger Fiscal Responsibility and Budget Management (FRBM) Act .
  • High inflation and weak monsoons are the biggest sources of worry for the new government. Everyone is waiting to see what plans the government lays down to tackle these challenges. It had already indicated in its Economic Survey that inflation, both wholesale price index based and consumer price index based, will be moderated by the end of this calendar year.
  • What reforms will the Modi government bring? The government is highly expected to reform the tax system and the labour laws among other things.
  • Will the government clamp down on subsidies? It has already indicated in its economic survey that it will rationalize subsidies for fertilizers and food. It is also expected to shift subsidy programme from price subsidies to income support.