The fiscal trend during FY21 turned a corner in the October-December quarter with sequential improvement in revenues, particularly in GST and income tax collection, alongside already-elevated excise duty collections helped by higher petroleum taxes. With pandemic risks largely capped for now, India has experienced a faster-than-expected pace of economic normalization. However, at the end of November the government’s fiscal deficit soared to 135.1% of FY21 Budget Estimates (BE). So, the crucial question is how will the FM tackle the pesky issue of fiscal deficit in the budget. Will the budget lean towards fiscal prudence? To discuss that Mint's Nasrin Sultana is joined by Aditi Nayar, Principal Economist, Icra.