New Delhi

Nirmala Sitharaman has been re-appointed as India’s finance minister in Prime Minister Narendra Modi’s new coalition government. 

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Despite failing to win a majority in the recent elections, the BJP has managed to retain key portfolios. 

Sitharaman, who will also be in charge of corporate affairs, faces the challenge of balancing fiscal demands in the new coalition environment. 

Economists point out that government spending may need to rise to maintain support, which could mark a shift from the conservative fiscal outlook of the past.

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With a recent surge in tax revenues and a record $25 billion payment from the central bank, the economic outlook looks promising. 

Additionally, S&P has indicated the possibility of a credit rating upgrade, indicating India’s improved economic condition. 

The economy, one of the fastest growing economies in the world, expanded by more than 8 per cent in the last financial year, and the central bank projects a 7.2 per cent growth for the current year 

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Despite these positive indicators, unemployment and rising cost of living emerged as major concerns for voters, affecting support for the BJP during the elections.

Looking ahead, the Modi government will face crucial state elections in Maharashtra, Haryana and Delhi. 

This politics can lead the government to use strategies aimed at the poor, women and youth to gain support. 

Nirmala Sitharaman has earlier focused on reducing infrastructure spending and fiscal deficit. 

Experts predict that the upcoming budget will focus on increasing funding for rural development and housing while maintaining fiscal discipline.