New Delhi, Jan 23 (TIWN) The Union Budget 2020 could focus on spending toward railways, defence and toward reviving sentiment in the real estate sector but the exercise would be to keep the outlays lean so that fiscal deficit does not slip beyond 3.5 per cent of GDP, a report by broking house Emkay Financials said.

"Expenditure to be squeezed based on the steep shortfall in revenue receipts, we believe that the government is likely to curtail expenditure by ₹1.8 trillion. Major savings are likely to emanate from food subsidy (transferred off balance sheet), lower interest payment outgo and savings generated from the PM-Kisan scheme. FY21 expenditure concentration to remain similar to that of FY20, where the budget allocation would continue to remain tilted toward railways, defence and urban infrastructure," said the report.

Gross borrowing figure is likely to be budgeted at ₹7.5 trillion, i.e., growth of 5.7% year-on-year. This is likely to keep the yields elevated near 6.8-7.0 per cent said the report. No big announcements but allocation could be tilted toward infra/power/real estate, than consumption boosters.