Arun Jaitley‘s second budget, due on Saturday, 28 February – perhaps the one for which he has had more time to think and prepare - may be more important that his first, which was dismissed by one commentator as “Chidambaram‘s budget with a saffron lipstickâ€.
Core inflation (non-food manufacturing inflation) is down to 0.9 percent, lower than December's figure of 1.5 percent. Clearly, the manufacturing sector is down if not out, and has significantly lower pricing power.
Arun Jaitley's second budget thus has the chance to break away and establish its own claim to fame. And the only way to make it stand out is by including strong political and economic signaling in it. In fact, both messages must convey the same intent.
Speaking to CNBC-TV18, Abhay Laijawala, head of research at Deutsche Equities India says that this is the last time the government can present an economic Budget. “Next year, it will be an election Budget,” he says.