Budget 2018: Expect rural boost, relief for middle class through tax cut

We expect Budget 2018 to provide a boost to consumption via higher allocation for rural-oriented schemes. Some relief for middle-class through a cut in tax rates/higher exemptions for tax savings cannot be ruled out either, given that this is the last full Budget before the general elections 2019. The focus on infrastructure spending to revive the capex cycle should see higher allocations for roads, railways, power programmes. We also anticipate some relaxation of fiscal deficit targets as this is the first year of transformational and disruptive reform like GST. However, overall the glide path for fiscal consolidation should continue in