UBS predicts that the new government will follow a medium fiscal consolidation path but with a populist tilt in its first budget after the elections. The RBI's higher-than-expected dividend transfer to the government provides fiscal leeway for populist spending, especially to support lower-income groups. The government is expected to target a fiscal deficit of 5.1% of GDP in FY25, aiming to reduce it further to below 4.5% of GDP by FY26. While tougher reforms may be challenging, supply-side reforms like manufacturing, labour laws, and skill development are likely to continue. Read The Rest at :
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