Union Budget 2020-21 is unlikely to mark a radical departure from past practices. According to a HDFC Bank report, fiscal deficit could breach the budgeted target by 20-30 bps to stay at 3.5-3.6 percent of GDP, weighed down by lower direct and indirect tax collections.

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The report, released on Friday, predicts there would be some tweaks in personal income tax slabs

or rates, but they are likely to be minor.

The government might attempt to increase the amount of cash transfer through PM Kisan or PM Kisan Nidhi scheme, it said.

Under this scheme all the small and marginal farmers are provided get up Rs 6,000 a year as minimum income support.

Abheek Barua, chief economist at HDFC Bank, said while these measures would be played up in the Budget speech, the amount allocated under these heads are likely to be small.

The government is expected to project a real GDP growth at 6.5 percent and inflation at 4 percent, Barua said. There scanty possibility of a major fiscal stimulus to ramp up growth in this Budget, he said.

The big bets for funding will remain on disinvestment, including asset monetisation, the report said.

RBI dividend transfer and expenditure compression are expected to provide some cushion to Centre's finances.

Continued pressure on bond yields is likely to be contained as OMO operations by the RBI are likely to support yields further, it said.

However, high inflation prints over the coming months are likely put pressure on yields. The bank expects the 10-year bonds to trade in the range of 6.40-6.60 percent by March-end.

First Published:Jan 17, 2020 4:40 PM IST