Amid a lot of promises, mkt to watch FM's Budget math

In a few hours from now, Union Finance Minister Piyush Goyal will be presenting the last Budget of Narendra Modi-led government.

This is an interim Budget but it will be crucial because the government has promised it will go beyond the limits of an interim exercise and try to address the pain points in the economy.

Agrarian crisis is one such pain point that can severely impact the poll prospects of the outgoing government which is constantly being targeted for doing little for farmers.

Middle class, which is expecting a huge tax cut, will throw up another challenge before Goyal, who is presenting his first Budget by accident.

The youth of the country for which not enough jobs have been created in the past close to five years, will be looking at the Budget for new avenues being promised.

Businesses, as usual, will expect the government to fulfil its commitment to give a corporation tax cut.

Amid all that, the market will keenly watch the key numbers such as fiscal deficit, Centre's borrowings and its lofty disinvestment plan and, how it is able to meet these crucial numbers.

On fiscal deficit, the focus will not be much on whether the government announces that the sacrosanct 3.3% number will be met by March 31 but what is the mode through which it is going to meet these numbers.

A small slippage of a percentage point or so in the fiscal deficit has already been priced in by the market but a close watch will be on whether the government rolls over three major subsidies of food, fertilizer and oil to next year just to show it has met the fiscal deficit target. The subsidy expenditure was likely to be Rs2.64 lakh crore in the current fiscal. It will interesting to see how much of that is rolled over to FY20.

Market will also watch the Centre's tax revenue projections and what is going to be the shortfall in the tax and non-tax revenues this year. That will determine how much the government will borrow from the market and small savings funds. That will also determine what kind of dividends the government would ask from the Reserve Bank of India, other financial institutions and public sector enterprises.

So far the RBI has given Rs 40,000 crore as dividend to the government. Of late, the Centre has increased its reliance on borrowing from small savings funds.