Amidst the uncertain global environment and gloomy economic outlook, many credible international institutions have repeatedly projected India as a sweet spot and, so to say, a safe harbour for investments.

The signs of peak inflation ebbing, the National Statistical Office  (NSO) forecast of a rather respectable 7 per cent gross domestic product growth for 2022-23, and relatively mild new Covid variant augur well as the backdrop for the finance minister to present the Budget on February 1. This feel-good factor helps given that it would be the last full-year Budget before the 2024 Lok Sabha elections. So far so good.

A closer look at the macroeconomic scenario, however, throws up a different picture and calls for following a cautious approach while firming up Budget proposals.

On the domestic front, even an optimist would find the combined fiscal deficit of around 10 per cent, the current account deficit projected at over 3.5 per cen