Investment-oriented Budget 2022 will put strain on liquidity for sure

RBI has a task on hands, and this time it will be different as private credit demand is likely to pick up. Hence liquidity management will need a different approach

The Union Budget is always the big policy announcement and the first for the year. In fact, it lays down the path for all players as the tax laws and expenditure patterns are revealed. Doing it in February has the advantage of the government being in a better position to execute the expenditure plans, especially capex. This Budget will go down as one which does a little of everything, which is a good way to go about it.

First, the deficit number is critical because as has been seen in the past that the government has stuck to the FRBM