According to analysts polled ahead of Tuesday’s presentation of the nation’s Union Budget, India, which is on track to reclaim the title of world’s fastest-growing major economy, would likely emphasize growth above fiscal reduction by increasing spending.

According to the median of predictions published by Bloomberg, Finance Minister Nirmala Sitharaman will likely boost the budget by nearly 14% year on year to 39.6 lakh crore ($527 billion) in the fiscal year beginning April. According to the survey, she is projected to keep tax rates essentially intact and instead relies on asset sales and a near-record borrowing of nearly 13 lakh crore to partially fund the plan.

Increased spending will keep the government’s budget deficit above 6% of GDP for another year. According to economists, Sitharaman would aim for a fiscal imbalance of 6.1 percent of GDP next fiscal year, down from 6.8 percent this fiscal year due to looser spending to bring the economy through the pandemic.

In a paper, economists Dhiraj Nim and Sanjay Mathur of Australia & New Zealand Banking Group Ltd. observed, “The recovery from the pandemic has been quick but incomplete.” “Therefore, a delicate balancing act between fiscal restraint and economic revival is required.”

With restrictions aimed at reducing the omicron variant of Covid-19, which is fueling unemployment and inequities, Sitharaman will be pressed to increase expenditure on everything from infrastructure to health care in order to create jobs and lift people out of poverty. Oxfam is advocating that the government levy a 1% surcharge on the wealthiest 10% of the population to fund health and education.

During the pandemic, the value of everything from stock prices to cryptocurrency and commodities has risen, resulting in a spike in wealth for the wealthy around the world. According to Oxfam, India now has more millionaires than France, Sweden, and Switzerland combined, despite urban unemployment nearing 15% in May and food insecurity worsening.

Despite the fact that the ruling Bharatiya Janata Party is heading into key state elections next month, most survey participants believe Sitharaman will refrain from any populist measures in the budget, even as expectations grow that she will change some tax rules to boost foreign demand for India’s sovereign debt.

Scrapping the capital gains tax on bond investors will help India’s case for inclusion in global bond indexes, which HSBC Holdings Plc estimates could bring in $40 billion in foreign investment. It may help relieve domestic pressures, given forecasts of near-record government borrowing at a time when the central bank is winding down part of its post-pandemic monetary support.

The manufacturing sector is expected to benefit the most from the budget, according to most respondents, with few experts predicting significant improvements in the country’s dominating services and agriculture sectors. At the same time, they believe that the government’s growth-promoting initiatives will benefit the poor the most.

According to Gaura Sen Gupta, an economist of IDFC First Bank Ltd. in Mumbai, the budget will continue to help the rural economy “via job creation and larger fertiliser subsidies.” “Fiscal policy will shift away from short-term relief measures and toward bolstering the engines of development — consumption and investment,” she said.