CNBC's Inside India newsletter: How will India spend its billions?

This report is from this week's CNBC's "Inside India" newsletter which brings you timely, insightful news and market commentary on the emerging powerhouse and the big businesses behind its meteoric rise. Like what you see? You can subscribe  here.

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