Finance Minister Pranab Mukherjee might have to fall back on disinvestment and other non-tax revenue sources while presenting the Budget for 2009-10 on July 6, economists believe.
"There is little room to cut expenditure or hike revenue. In this scenario, the government will go for disinvestment, auction of spectrum and other non-tax revenue to check fiscal deficit," economic think tank National Council for Applied Economic Research senior fellow Shashank Bhide said.
He said the government might take some major decisions related to disinvestment in big public sector units.
Economists feel Mukherjee faces the double challenge of spurring growth in the sagging economy and checking the increasing burden on the government's exchequer.
"Rise in fiscal deficit is sure a matter of concern, but the government's focus will be on boosting demand in domestic economy and facilitating increase of purchasing power in the backdrop of global meltdown," senior fellow at Research and Information System (RIS) Sachin Chaturvedi said.
To revive growth, the economists suggest heavy investment in infrastructure such as roads, freight corridor and linking of rivers, and social sectors programmes like employment guarantee scheme, health and education.
