Budget Aims to Spur Growth and Ease Rates Through Lower Deficit, Infra Spend
• Lower fiscal deficit to 5.1% of GDP will reduce government borrowing and put downward pressure on interest rates
• Increased infrastructure spending is non-inflationary and will allow RBI more room to reduce rates
• Government sending signal to RBI that fiscal consolidation done, now RBI should boost liquidity and soften rates
• Bankers expect home loans to get cheaper due to affordable housing schemes announced in budget
• Faster fiscal consolidation and lower borrowings should cool yields if revenue estimates hold up