Key Points
However, similar to the 2019 Interim Budget, this one may still have noteworthy, if not extraordinary, implications for investors...
Goldman Sachs expects that the cooking gas subsidy will be less than 0.1% of GDP due to lower oil prices, and the fertiliser subsidy is expected to be slightly higher than the pre-pandemic average of 0.5% of GDP in FY25...
Goldman Sachs also predicts that the total issuance for both the central and state governments in FY25 is expected to be approximately Rs 17 - 18 trillion..
To cover the central government's fiscal deficit of nearly Rs 18 trillion in FY25, Goldman estimates a net borrowing of around Rs 12 trillion, after accounting for non-market financing from sources like small savings and state provident funds..
Additionally, for state governments, they assume that 70% of the fiscal deficit in FY25 (equivalent to 2.5% of GDP) will be financed through market loans, resulting in state net borrowing of Rs 5.8 trillion in FY25..
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