Budget 2018 today - Finance Minister has a tough balancing act

Finance Minister Arun Jaitley will present the fifth Union Budget of the Narendra Modi government today. There are high expectations that the FM may raise the minimum exemption limit from the current level of Rs. 2.5 lakh. A standard deduction may replace multiple outdated deductions to reduce the tax burden on salaried employees.

This is the last full Budget before the elections

However, PM Modi has a tough balancing act in this Budget, whether to maintain financial prudence or hand out sops to make rural voters happy ahead of the next election.

He will want to keep global investors and credit-rating companies on his side but to do that he will have to stick to his goal to reduce one of Asia's largest budget deficits.

In this budget before the elections, Jaitley will need a growth boost for an economy that's slowing down to a four-year low, while making angry young voters happy. These are the same voters who gave the BJP its worst performance in Gujarat in December.

With crude oil prices rising this is putting an upward pressure on inflation while the government has limited room for a stimulus, say experts. This means the finance minister will have to make some difficult choices.

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