On 1 February 2019, the present government will present a vote-on-account budget, also known as the interim budget. The final and complete budget is expected to be presented by the newly formed government after the general assembly elections, which is why brokerage houses are not expecting major policy changes but rather just a presentation of the expenditure plan for approval from the Lok Sabha.
On the economic front, most brokerages are expecting the fiscal deficit target to remain 3.5 percent of the GDP for the next financial year (2019-20) on account of the support schemes that are expected for the agricultural sector. According to a CNBC TV18 report citing brokerage house Motilal Oswal's opinion, the budget allocation for Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) or packages targeting farmers is expected to increase.
With regard to the budget 2019, Standard Chartered in its report said that the RBI's decision to move any excess capital to the government in cash or bonds is not going to help with the fiscal deficit as it will be most likely spent. Additionally, any positive effect from this will be short-lived.
As for the tax rates, Motilal Oswal does not expect any changes in the personal tax front or any major changes in corporate tax.