How will India spend its billions?

The fallout from the result of India’s general election will be in full view next week.

Nirmala Sitharaman, India’s finance minister, is set to unveil her seventh budget on Tuesday, which will offer clues about how Prime Minister Narendra Modi’s political party, the BJP, is likely to work with its allies to run a coalition government.

There are high expectations for a “populist” budget since the recent general election results delivered a slimmer than expected win for Modi.

“The upcoming budget is more significant than in previous years, as it will reflect whether the election setback will have any impact on the direction of government policy and priorities,” said Premal Kamdar, head of India equities at UBS Wealth Management, in a research note to clients.

Modi has been forced to work with smaller parties, one of which represents India’s poorest state of Bihar. The demands from the various members of the fragile alliance could mean the government opens the taps on welfare spending. This will likely lead to increased borrowing.

However, analysts at Goldman Sachs believe that’s unlikely to be the case. “We push back against both views,” said Santanu Sengupta, chief India economist at Goldman Sachs.

They suggest that policymakers may be addicted to the growth created from the infrastructure spend seen over the past few years and “may not be willing” to give up on it just yet.

Far from increasing the amount of government borrowing, Sengupta and team are also entertaining the idea that the deficit could actually fall.

There is some evidence to back this view. Over the past four years, borrowing has fallen more than the budget typically targets. Bank of America analysts, who are also open to the idea that the deficit may fall, believe it is “refreshing” to see a finance minister “under-promise, over-deliver.”