Nirmala Sitharaman's Budget 2020: Balancing act or leap of faith?

FM fights shrinking fiscal space by increasing non-tax revenue, freezing growth in subsidies

Finance Minister Nirmala Sitharaman delivered the longest Budget speech in history on Saturday, clocking in at two hours and 37 minutes. In the course of the speech, the FM sought to restore confidence in the Budgetary process by restructuring the fiscal consolidation path while staying within the confines of the Fiscal Responsibility and Budget Management Act. 

Accordingly, the fiscal deficit for the ongoing fiscal year, 2019-20, was modified to 3.8 per cent of GDP; next year’s fiscal deficit target was set at 3.5 per cent. Sitharaman achieved this feat in spite of constrained tax revenue, a larger giveaway to the