Jaitley to meet economists two days before Budget

The finance ministry has called for a meeting with economists just two days before the Budget is presented in Parliament. The timing of the meeting is quite unprecedented in Indian public finance but is more in line with the degree of openness demonstrated by the ministry in the run-up to the Budget this year.

Two economists with knowledge of the development said they were surprised with the call, since no agenda had been circulated for the meeting. Finance minister Arun Jaitley and his team, including junior finance minister Jayant Sinha would take part in the meeting. But it is unlikely that any inputs from the meeting can be used by the ministry to change anything in the Budget, including the crucial numbers like fiscal and revenue deficit, as there will be no time from there on to the Budget, which will be tabled in the Lok Sabha at 11 am on Monday.
Read our full coverage on Union Budget 2016
 

The finance minister has already met the economists as part of his round of pre-Budget meetings in January.

In those meetings, he also met trade unions, industrial leaders, bankers, and farmers.

The timing of the meeting is significant as it comes just a day after the finance ministry will release the Economic Survey for 2015-16. In recent years, the Chief Economic Advisor as the author of the survey meets the media after the survey is tabled in Parliament.

The government faces a huge fiscal pressure this year in the framing of the Budget. In the wake of the weakness in the global economy, the Indian economy has no growth support to expect from abroad. The three consecutive crop failures has on top of this dampened the domestic demand, making it hard for the industrial sector to invest in additional capacity.

The key metric that will be watched out will be the deficit figures to indicate if the Indian government plans to expand public investment by borrowing more. Yet, as the government debt papers both from the Centre and states have become quite sought after in international debt markets, any change in their numbers will create an impact on the returns for banks and foreign institutional investors who hold those papers.