Market Watch
Policy

Slowdown gives India Inc what Budget didn't

The costBCCL
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The cost
The Centre will lose an estimated Rs 1.45 lakh crore in revenue due to the tax cuts. That could also mean a bigger hole in government's finances. Experts say that the government is likely to run a fiscal deficit higher than the 3.3% of GDP it has budgeted for. If the government attempts to counter this through spending cuts, it may hurt the economy.

A higher shortfall in government finances could mean the need to borrow more and leave less for the private sector. However, divestment offers another way of raising money. The government is also expected to recoup some of the revenue lost in the form of higher-than-budgeted dividends likely to be passed on by public sector companies if they show stronger profits.
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