Given recent slowdown in the economy there are expectations from the final budget would contain further stimulus measures to boost the economy. With the RBI finally realizing that inflation is subdued they have cuts rates by 75bps so far in 2019. However transmission of policy rate cuts has been an issue and so far there has been negligible transmission given tight liquidity conditions.
Tight fiscal and monetary policy over the past few years coupled with major
structural changes have taken a toll on growth which was further exacerbated post
the IL&FS crisis and its fallout. This is reflected in high frequency numbers like IIP
and auto sales numbers as well as the GDP numbers which slowed down to 5.8%
in Q4FY19 from 8.0% in Q1FY19.
