Neelkanth Mishra, managing director and India equity strategist at Credit Suisse in an interview with CNBC-TV18 discussed the fine prints of the 2020 Union budget presented by finance minister Nirmala Sithraman on Saturday.

He said: “There is a sharp change in how much the states are getting from the central tax collections. The 14th Finance Commission has recommended 42 percent devolution. The numbers seen in the gross versus net that comes in the central budget is a bit different because there are things like surcharges; the income tax surcharges that are levied are not shareable, there are certain types of duties on petrol and diesel which we are not shareable with states. So it’s never 42 percent. It’s generally slightly less than that.

“However, what is remarkable is that

“One of the reason which exacerbates this issue is how the goods and services tax

"This year’s state budgets will be much more interesting and it will be important for us to understand how the fiscal impulse picking out because unlike the centre they do not have an escape clause and their borrowings get frozen by September-October."

On agriculture front, Mishra said, “There is a lot more happening on the agri side in terms of market access. In fact, one of the fascinating features of recent onion price spike is a lot of the gains have gone to the farmers; earlier the onion price increase used to benefit the traders and the farmers would not get incentivised.

“So there are many other things which are happening in terms of market access, in terms of access to credit and all of those things matter a lot more than specific rupees that are to be transferred to farmers’ pocket,” added Mishra.

On the state of the economy, he said: “It’s important to highlight that expenditure to GDP is budgeted to rise in FY20 and FY21 which is an important policy statement that when the economy is slowing down the government is trying to spend; given the fiscal constraint they cannot do much.

"So it is much more prudent to use non-tax revenues in these times and therefore, the telecom sector spike that we have seen in the budgeted numbers in FY21 and the disinvestment spike that we have seen in FY21 as well.

"So together 2.1 plus 1.33; I would say 1 trillion from telecom, which is extra, about 1.5 percent of GDP is to come from these two angles which is important countercyclical support to the economy.”