'This is a period of significant uncertainty, of unknown unknowns.'

Officials said there had been no official word or indication from the top yet. The expectation from officials is to do what they can, but it is understood that all fiscal and budgetary targets don't matter anymore.

''Even without major reforms, with a business as usual scenario, and with current inflation trends, we should be clocking around 11 to 12 per cent nominal growth.' 'That is not happening and is a source of worry,' Rathin Roy tells Arup Roychoudhury.

While the FPI limit on most bond issues would not be raised above 6 per cent, there would be some in which there would be no limits, reports Arup Roychoudhury.

This is due to the newly formed Union Territories of Jammu and Kashmir, and Ladakh, which will get funds from the Centre's share, which means devolution will be for 28 states compared to 29 earlier.

Any reduction in devolution could aggravate the strained relations between the Centre and some opposition-ruled states on a number of issues, including CAA.

Processes are at an advanced stage for a number of assets of the Centre and central public sector enterprises (CPSEs) to be monetised. The assets include office space, apartments, factories, land, power transmission assets, sports stadia, gas pipelines, and telecom assets.

Oil sank to the lowest level in a month after shedding all of its gains from the US-Iran clash as traders waited to see whether any further hostilities will disrupt exports from the East Asia.

If the fiscal deficit for the year can be maintained at Rs 7.04 trillion, the deficit as a percentage of GDP will slip to 3.44 per cent

While the situation Sitharaman finds herself in may not be that good, how does it stack up against her three immediate predecessors Pranab Mukherjee, P Chidambaram and the late Arun Jaitley?

It is also likely to assume a deflator of around 4 per cent. That could take the nominal GDP outlook for FY21 to around 10 per cent. It is this nominal GDP forecast on the basis of which the finance ministry is calculating key Budget targets like the fiscal deficit as a percentage of GDP and tax revenue growth for the coming year.

Finance Minister Nirmala Sitharaman will present her second Budget a little more than a month from now. Like any other FM, Sitharaman will depend on her team of bureaucrats and advisors to frame and present the Budget.

At a pre-Budget meeting, the FM was asked to ensure that NBFCs come out of the liquidity crisis they are facing with the help of RBI. They also spoke about the futility of trying to achieve a 3 per cent fiscal deficit target over the medium term.

Even with the possible expenditure roll-overs and off-budget financing, the fiscal deficit target will not be met. The FRBM Act, after its amendment in 2018, allows a fiscal deficit slippage of not more than 0.5 per cent for any given year, provided there are justifications. These justifications include war, national security, severe collapse in the agriculture sector, a major natural calamity, big structural economic reforms, or the decline in real output growth of a quarter by at least 3 percentage points below its average of the previous four quarters.

Long-term capital gains tax may be scrapped and the burden of dividend distribution tax could perhaps be shifted from companies to shareholders. Also, the Budget could provide income tax relief for the salaried classes, while proposing tax sops for small, medium and micro enterprises.

'We expect a pick-up in the second half of the current fiscal. But before that, data is likely to show a further slowdown. The second quarter print is likely to be worse than the first quarter,' said a senior official.

The economy could grow at 6-6.5 per cent this fiscal year (2019-20 or FY20), said Chief Economic Advisor Krishnamurthy Subramanian, revising his earlier estimate of 7 per cent in the Economic Survey. In an interaction with Arup Roychoudhury, he said supply-side measures, including corporation tax cuts, will boost consumption and demand, and non-tax revenue may make up for shortfall in tax revenues.

Sajjid Chenoy, India economist at JP Morgan is the new part-time member.

For his first Budget in July 2014, Jaitley inherited a fiscal deficit target of 4.1 per cent of GDP. From 4.1 per cent, the fiscal deficit came down to 3.4 per cent by 2018-19, with two slippages from the budgeted targets, in 2017-18 and 2018-19, the former due to introduction of the GST, says Arup Roychoudhury.

As the government plans to take sector-specific steps to tackle the slump, Finance minister Nirmala Sitharaman will soon hold talks with representatives from various sectors to get and take steps so that the confidence of those sectors can be restored.