India’s Fiscal Situation Precarious: Eurasia Group

The Eurasia Group, a global leader in political risk analysis, advisory and consulting has said that India's fiscal situation is precarious, as the government faces a widening fiscal deficit, marked by the under performance of the goods and services tax.

"A weakened economy will in turn feed further economic nationalism and protectionism, weighing on India's troubled course in 2020," the firm has said.

In an article titled: "India gets Modi-fied", authored by Ian Bremmer and Cliff Kupchan, have said that Prime Minister Narendra Modi has spend much of his time promoting controversial social policies at the expense of economic agenda.

"The impacts will be felt in 2020, with intensified communal and sectarian instability, as well as foreign policy and economic setbacks," the authors have stated.

Union Finance Minister, Nirmala Sitharaman is set to deliver the Union Budget 2020-21 on Feb 1, 2020. Analysts and economists would watch the fiscal deficit number very closely.

Sovereign Rating Agencies would look for fiscal deficit discipline and India must avoid a rating watch. Many analysts expect the fiscal deficit number to be closer to the 3.7 to 3.8 per cent mark. What would also be eagerly watched is the fiscal deficit number projections for 2020-21.
In any case, a smart budget is expected that will curb the fiscal deficit and push India towards growth.

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