Latest estimates of government revenue and expenditure show all this will have to be done within the constraint of keeping the Centre’s fiscal deficit at less than 6.5% of the GDP as anything higher could impact sovereign ratings.

The best piece of news that Mukherjee will receive on Monday, as he drives for a quick Cabinet meeting to ratify the Budget before he addresses the Lok Sabha, is the fresh slide in global crude prices. It has slumped to $65.63 a barrel in New York, almost 10% lower than the year’s peak after US unemployment rose to highest in 26 years, signalling that the world’s largest energy user remains mired in recession.

Agency reports say prices may drop even more this week as US fuel inventories will climb as its weak economy curbs demand. Last week India raised petrol prices by Rs 4 a litre and diesel by Rs 2 to help public sector oil marketing companies recover some of their losses for selling kerosene and LPG at less than market prices. This means Mukherjee will not have to impose any extra cess on diesel and petrol for building roads and highways from the present Rs 2 a litre.

The optimism is also shared by the movement in the rupee, which has risen for a full week for the first time since May. The rupee has moved on speculation that government spending will reinforce growth in the economy that logged a 6.7% rise in 2008-09 and is expected to move up by over 7% this fiscal.