India budget reflects pressures of alliance politics

Significance

This supersedes the interim budget presented in February. Prime Minister Narendra Modi won a third straight term at the April-June general election, but his ability to command a majority in parliament’s lower house now rests greatly on the support of two key allies of his Bharatiya Janata Party (BJP).

Impacts

• The opposition, stronger after the recent elections, will continuously question the government’s commitment to alleviating hardship.
• Reaffirming commitment to fiscal discipline will please international financial institutions.
• Infrastructure will continue to be a key focus of expenditure.