The finance ministry faces a delicate balancing act in the upcoming union budget for FY17/18, which will be unveiled on 1st February. On the one hand, it will be aiming to boost demand following demonetisation and in light of upcoming state elections. On the other hand, it will want to continue demonstrating its commitment to fiscal consolidation. The most likely outcome is that finance ministry slows the pace of fiscal tightening in FY17/18.
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